UC-NRLF 


SB   5T1   321 


Trading  with  the 
Enemy  Act 


WITH  THE  REPORT  ON  THE 

ACT  SUBMITTED  TO  THE 

SENATE  BY  THE  COMMITTEE 

ON  GOMMERGE 


National  Bank  of  Commerce 
in  New  York 


OCTOBER,  1917 


GIFT  or 
T)qXl$iu&  QaHjGal  C^%um^j>l£l 


Trading  with  the   Enemy 

Act 


PART  I. 

Note  by  John  Qumn, 

PART  II. 

The  Act,  approved  by  the  President, 
October  6,  1917. 

PART  III. 

Report  on  the  Act  submitted  to  the  Senate 
August  15,  1917,  by  the  Senate  Com- 
mittee on  Commerce. 


• 


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PART  I. 
Note 

(The  following  note  consists  in  large  part  of  a  reprint  of  a  letter  to  The 
New  York  Times  published  prior  to  the  enactment  of  the  Trading 
with  the  Enemy  A  ct  and  which  attracted  considerable  attention.  The 
writer  is  an  authority  upon  the  principles  of  international  law 
governing  transactions  now  covered  by  the  Act,  and  his  brief  refer- 
ences to  the  salient  provisions  of  the  Act  as  regards  banks  and 
banking  transactions  will,  it  is  believed,  be  found  helpful). 

The  l 'Trading  with  the  Enemy  Act"  which  has  just 
been  enacted  into  law  is  one  of  the  most  important  pieces 
of  administrative  legislation  enacted  to  meet  the  problems 
raised  by  the  war.  It  deals  with  a  great  variety  of  sub- 
jects, among  them  the  delicate  matters  of  administering 
patent  rights,  controlling  foreign  insurance,  censorship 
of  cables  and  mails,  in  addition  to  banking  transactions. 
Since  this  brochure  is  designed  primarily  for  bankers,  and 
since  the  Act,  considered  from  a  standpoint  of  public 
policy,  is  most  deeply  concerned  with  banking  transac- 
tions, I  have  limited  myself  here  to  a  discussion  of  the 
banking  portions  of  the  Act. 

The  Act  gives  bankers  and  other  business  men,  as  I 
wrote  to  The  New  York  Times  September  5,  1917,  when 
it  was  under  consideration  before  the  Senate,  "a  perfectly 
definite  law  to  follow.* '  It  had  come  to  my  attention 
prior  to  that  time  that  some  banks  and  bankers  had  "a 
rather  surprising  lack  of  knowledge  of  the  legal  effect  of  a 
declaration  of  war."  Because  of  my  belief  that  that  lack 
of  knowledge  was  leading  to  dangerous  consequences,  I 
went  to  Washington  and  urged  Senator  Fletcher,  Chair- 
man of  the  Senate  Committee  on  Commerce,  to  do 
everything  in  his  power  to  expedite  the  passage  of  the 
then  pending  Act,  which  was  then  in  the  hands  of  a  sub- 
committee of  his  committee.  Senator  Fletcher  called  a 
meeting  of  the  full  committee  on  the  following  day  and  the 
bill  was  very  shortly  reported  out,  with  many  very  ad- 
mirable amendments.  As  I  said  in  my  letter  to  The  Times, 
the  banking  transactions  at  which  the  Act  is  aimed  are 
"of  the  utmost  concern  to  the  speedy  success  of  the  nation 
and  its  Allies  in  the  present  war."  In  my  letter  to  The 
Times  I  said  further: 


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• 


"A  large  part  of  the  support  which  America  is  thus 
far  giving  to  its  allies  in  this  war  is  financial.  All  of  the 
belligerents  are  directly  concerned  with  maintaining  their 
credit  and  the  parity  of  exchange,  not  only  in  Europe,  but 
in  South  America  and  the  Orient.  It  should  not  be  nec- 
essary to  say  that  anything  which  promotes  the  business 
and  financial  interests  of  enemy  countries  or  citizens  or 
subjects  of  enemy  countries,  or  which  expedites  payments 
or  business  ventures  of  citizens  or  subjects  of  enemy  coun- 
tries, including  the  maintenance  of  their  credit,  and  which 
gives  them  the  use  of  banking  facilities  in  neutral  coun- 
tries, is  a  military  advantage,  and  that  anything  which 
hinders  the  freedom  of  their  exchange,  deprives  them  of 
the  use  of  banking  facilities,  and  lowers  their  credit  is  a 
military  disadvantage. 

"Ina  war  of  the  present  world-wide  dimensions  the 
old  forms  of  trading  with  the  enemy,  involving  the  phys- 
ical transfer  of  tangible  goods,  are  largely  obsolete.  Ger- 
many^ one  attempt  to  imitate  the  blockade  runners  of  the 
Civil  War  with  the  submarine  Deutschland  was  abruptly 
abandoned.  The  entry  of  America  into  the  war,  followed 
by  President  Wilson's  embargo,  has,  we  all  sincerely  hope, 
put  a  stop  to  the  surreptitious  smuggling  of  American 
goods  into  Germany  through  the  territories  of  contiguous 
neutrals.  The  chief  form  of  trade,  therefore,  in  which 
Germany  can  engage  to  her  advantage  is  that  within  the 
limit  of  banking  transactions. 

"It  is  well  known  that  one  of  Germany's  methods  of 
capturing  world  trade  was  the  establishment  of  strong 
banks  with  subsidiaries  in  Central  and  South  America  and 
the  Orient.  It  is  by  manipulations  through  these  banks 
that  German  exchange  is  to  be  maintained  and  German 
credit  bolstered,  if  at  all,  during  the  present  struggle. 
This  war  is  being  fought  with  money  as  well  as  with  men. 
It  is  a  great  advantage  to  Germany  to  keep  up  the  pur- 
chasing power  of  the  mark.  Anything  which  would  tend 
to  beat  down  the  value  of  the  mark  is  of  advantage  to  the 
allies.  It  would  therefore  seem  to  be  a  patriotic  duty  on 
the  part  of  bankers  to  refrain  from  any  dealings  whatever 
with  German  banks  or  their  South  American  or  Oriental 
subsidiaries.' ! 

In  discussing  the  then  pending  Act  in  my  letter  to 
The  Times  of  September  5th,  I  further  said: 


"The  Trading  with  the  Enemy  Act  itself  is  stated  by 
both  the  House  and  Senate  Committee  reports  to  be  de- 
claratory of  the  existing  common  law  of  the  United  States. 
In  its  definitions  of  trade,  the  Act  lays  particular  emphasis 
on  banking  transactions.  The  word  'trade'  is  thus 
defined: 

(a)  Pay,  satisfy,  compromise,  or  give  security 
for  the  payment  or  satisfaction  of  any  debt  or 
obligation; 

(b)  Draw,  accept,  pay,  present  for  acceptance 
or  payment,  or  endorse  any  negotiable  instrument  or 
chose  in  action ; 

(c)  Enter  into,  carry  on,  complete,  or  perform 
any  contract,  agreement,  or  obligation; 

(d)  Buy  or  sell,  loan  or  extend  credit,  trade  in, 
deal  with,  exchange,  transmit,  transfer,  assign,  or 
otherwise  dispose  of,  or  receive  any  form  of  property; 

(e)  To  have  any  form  of  business  or  commercial 
communication  or  intercourse  with. 

"The  Act  does  not  have  the  effect  of  making  illegal 
anything  which  is  legal  at  the  present  time,  with  but  one 
exception,  namely,  that  it  prohibits  dealings  with  allies  of 
an  enemy,  such  as  Austria,  which  is  not  forbidden  by  ex- 
isting international  law.  Its  passage  does  not  mean,  as  I 
have  pointed  out,  that  any  prior  transactions  were 
legalized. 

"Two  main  effects  will  result  from  its  passage.  The 
first  will  be  to  add  a  criminal  penalty  to  the  civil  penalties 
and  dangers  which  now  attach  to  the  acts  prohibited  by 
the  international  law  of  this  country,  as  evidenced  by  the 
decisions  of  our  Courts.  The  other  effect  will  be  to  per- 
mit the  licensing  of  certain  acts  and  payments  under 
strict  Government  supervision  within  very  closely  defined 
limits  for  the  purpose  of  mitigating  the  present  rules  of 
law  which  prohibit  every  sort  of  transaction  with  an 
enemy.     As  was  stated  in  the  Senate  report, 

'The  purpose  of  this  Bill  is  to  mitigate  the  rules  of  law  which 
prohibit  all  intercourse  between  the  citizens  of  warring  nations,  and 
to  permit,  under  careful  safeguards  and  restrictions,  certain  kinds  of 
business  to  be  carried  on.  It  also  provides  for  the  care  and  admin- 
istration of  the  property  and  property  rights  of  enemies  and  their 
allies  in  this  country  pending  the  war.     The  spirit  of  the  Act  is  to 


permit  such  business  intercourse  as  may  be  beneficial  to  citizens  of 
this  country,  under  rules  and  regulations  of  the  Secretary  of  Com- 
merce, (now  the  President)  which  will  prevent  all  enemies  and  their 
allies  from  receiving  any  benefits  therefrom  until  after  the  war 
closes,  leaving  to  the  Courts  and  to  the  future  action  of  Congress 
the  adjustment  of  rights  and  claims  arising  from  such  transactions.' " 

As  I  explained  in  my  letter  to  The  Times ,  even  prior 
to  the  passage  of  the  Act,  it  was  not  only  the  patriotic  duty 
of  bankers  to  refrain  from  dealings  with  alien  enemies,  but 
it  was  their  legal  duty  to  do  so.  The  Trading  with  the 
Enemy  Act  not  only  extends  what  I  may  call  the  com- 
mon international  law  of  civilized  countries,  as  distin- 
guished from  the  perversions  and  distortions  of  what 
had  been  believed  to  be  international  law  that  in  this 
war  have  been  resorted  to  by  the  countries  who  speak  of 
and  treat  solemn  treaties  as  "mere  scraps  of  paper/'  so 
as  to  make  illegal  transactions  with  allies  of  enemies  as 
well  as  with  enemies,  for  example  with  Austrians  as  well  as 
Germans,  but  it  places  the  acts  in  question  in  the  category 
of  crimes  and  adds  fine  and  imprisonment  to  the  machinery 
for  their  prohibition.  I  need  not  refer  here  at  length  to 
the  drastic  penal  provisions  of  the  Act,  for  I  am  sure  that 
the  whole  Act  so  far  as  it  relates  to  banks  and  bankers 
will  receive  the  careful  attention  of  the  banking  world 
generally  in  this  country. 

The  Act  will  tend  to  relieve  the  hardship  which  might 
otherwise  be  imposed  upon  persons  residing  in  this  country 
dependent  for  their  support  upon  foreign  funds  deposited 
in  American  banks  prior  to  the  declaration  of  war.  Such 
payments  may  by  express  provision  be  licensed  by  per- 
mission of  the  Secretary  of  Commerce.  The  Act  excludes 
from  its  licensing  provisions: 

"Any  act  or  attempted  act  of  transmission,  or  transfer 
of  money  or  other  property  out  of  the  United  States,  and 
the  use  or  attempted  use  of  such  money  or  property  as  the 
basis  for  the  establishment  of  any  credit  within  or  outside 
of  the  United  States,  to,  or  for  the  benefit  of,  or  on  account 
of,  an  enemy  or  ally  of  an  enemy." 

The  events  and  revelations  of  the  past  few  days, 
showing  the  criminal  activities  of  German  and  pro-German 
plotters  in  this  country  while  we  were  still  at  peace,  seem 
to  me  amply  to  justify  what  I  said  in  my  Times  letter  about 
"the  wide  use  of  German  money  in  this  country  during  the 


last  two  or  three  years  to  bribe,  to  subsidize  pro-German 
propaganda,  to  incite  labor  disputes,  and  to  bring  about 
explosions  and  the  burning  of  property,  involving  in  many 
cases  wholesale  murder."  One  of  the  good  effects  of  the 
Act  should  be  promptly  to  dam  up  physically  the  stream 
of  German  money  which  has  been  the  means  of  promoting 
such  material  and  malicious  mischief. 

As  finally  passed  with  the  Senate  amendments,  the 
Act  is  an  admirable  piece  of  legislation.  It  not  only 
points  out  what  may  not  be  done  and  prescribes  appro- 
priate penalties,  but  it  indicates  the  proper  procedure  for 
obtaining  Government  permission  to  carry  out  transac- 
tions under  proper  safeguards  to  mitigate  the  possible 
harsh  cases  under  the  general  law.  One  of  the  most  im- 
portant features  of  the  Act  provides  for  the  taking  over 
of  alien  property,  its  conservation  in  the  hands  of  the 
alien  property  custodian,  and  its  investment  in  United 
States  bonds.  This  investment  feature  is  an  entirely  new 
provision  of  law,  and  as  stated  in  the  Senate  Report,  is 
found  in  no  previous  statute,  and  is  in  line  with  modern 
policies  with  reference  to  private  property  in  time  of  war. 
The  alien  property  custodian  is,  by  the  Act,  vested  with 
all  the  powers  of  a  common  law  trustee.  The  act  author- 
izes the  investment  in  United  States  bonds  of  the  funds 
of  alien  enemies  held  by  American  banks,  thus  making 
them  contribute  to  the  success  of  the  national  cause. 
This  is  an  eminently  just  measure,  since  it  provides  a 
method  for  keeping  them  safely,  preventing  their  use  for 
enemy  purposes  and  making  them  serve  a  public  purpose. 
When  we  realize  that  under  the  former  harsh  laws  of 
war,  such  funds  might  have  been  confiscated,  and  when 
we  recall  to  mind  the  levying  of  forced  loans  with  scant 
chance  of  repayment  by  the  Germans  in  Belgium  and 
Northern  France,  this  provision  of  the  act  seems  not 
only  just,  but  generous.  One  of  the  best  features  of  the 
Act  is  its  elasticity.  It  gives  wide  discretionary  powers 
to  the  President  and  makes  it  possible  for  him  to  deal 
quickly  and  effectively  with  special  situations  as  they  arise. 

JOHN  QUINN, 

31  Nassau  Street.  New  York.. 


PART  II. 


Trading  with  the  Enemy  Act 

Approved  October  6,  1917 

(Public  No.  91— 65th  Congress) 
(H.  R.  4960) 

An  Aet  to  define,  regulate,  and  punish  trading  with  the  enemy,  and  for  other 

purposes. 

Be  it  enacted  by  the  Senate  and  House  of  Representa- 
tives of  the  United  States  of  America  in  Congress  assem- 
bled, That  this  Act  shall  be  known  as  the  '  'Trading  with 
the  enemy  Act." 

SEC.  2.  That  the  word  "enemy,"  as  used  herein, 
shall  be  deemed  to  mean,  for  the  purposes  of  such  trading 
and  of  this  Act — 

(a)  Any  individual,  partnership,  or  other  body  of 
individuals,  of  any  nationality,  resident  within  the  terri- 
tory (including  that  occupied  by  the  military  and  naval 
forces)  of  any  nation  with  which  the  United  States  is  at 
war,  or  resident  outside  the  United  States  and  doing  busi- 
ness within  such  territory,  and  any  corporation  incorpo- 
rated within  such  territory  of  any  nation  with  which  the 
United  States  is  at  war  or  incorporated  within  any  country 
other  than  the  United  States  and  doing  business  within 
such  territory. 

(b)  The  government  of  any  nation  with  which  the 
United  States  is  at  war,  or  any  political  or  municipal  sub- 
division thereof,  or  any  officer,  official,  agent,  or  agency 
thereof. 

(c)  Such  other  individuals,  or  body  or  class  of  indi- 
viduals, as  may  be  natives,  citizens,  or  subjects  of  any 
nation  with  which  the  United  States  is  at  war,  other  than 
citizens  of  the  United  States,  wherever  resident  or  wher- 
ever doing  business,  as  the  President,  if  he  shall  find  the 
safety  of  the  United  States  or  the  successful  prosecution 
of  the  war  shall  so  require,  may,  by  proclamation,  include 
within  the  term  "enemy." 


The  words  "ally  of  enemy,M  as  used  herein,  shall  be 
deemed  to  mean — 

(a)  Any  individual,  partnership,  or  other  body  of 
individuals,  of  any  nationality,  resident  within  the  terri- 
tory (including  that  occupied  by  the  military  and  naval 
forces)  of  any  nation  which  is  an  ally  of  a  nation  with 
which  the  United  States  is  at  war,  or  resident  outside  the 
United  States  and  doing  business  within  such  territory, 
and  any  corporation  incorporated  within  such  territory  of 
such  ally  nation,  or  incorporated  within  any  country 
other  than  the  United  States  and  doing  business  within 
such  territory. 

(b)  The  government  of  any  nation  which  is  an  ally 
of  a  nation  with  which  the  United  States  is  at  war,  or  any 
political  or  municipal  subdivision  of  such  ally  nation,  or 
any  officer,  official,  agent,  or  agency  thereof. 

(c)  Such  other  individuals,  or  body  or  class  of  indi- 
viduals, as  may  be  natives,  citizens,  or  subjects  of  any 
nation  which  is  an  ally  of  a  nation  with  which  the  United 
States  is  at  war,  other  than  citizens  of  the  United  States, 
wherever  resident  or  wherever  doing  business,  as  the 
President,  if  he  shall  find  the  safety  of  the  United  States 
or  the  successful  prosecution  of  the  war  shall  so  require, 
may,  by  proclamation,  include  within  the  term  "ally  of 
enemy.' ' 

The  word  "person,"  as  used  herein,  shall  be  deemed 
to  mean  an  individual,  partnership,  association,  company, 
or  other  unincorporated  body  of  individuals,  or  corporation 
or  body  politic. 

The  words  "United  States,"  as  used  herein,  shall  be 
deemed  to  mean  all  land  and  water,  continental  or  insular, 
in  any  way  within  the  jurisdiction  of  the  United  States  or 
occupied  by  the  military  or  naval  forces  thereof. 

The  words  "the  beginning  of  the  war,"  as  used  herein, 
shall  be  deemed  to  mean  midnight  ending  the  day  on 
which  Congress  has  declared  or  shall  declare  war  or  the 
existence  of  a  state  of  war.* 

♦April  6th,  1917. 


The  words  "end  of  the  war,"  as  used  herein,  shall  be 
deemed  to  mean  the  date  of  proclamation  of  exchange  of 
ratifications  of  the  treaty  of  peace,  unless  the  President 
shall,  by  proclamation,  declare  a  prior  date,  in  which  case 
the  date  so  proclaimed  shall  be  deemed  to  be  the  "end  of 
the  war"  within  the  meaning  of  this  Act. 

The  words  "bank  or  banks,"  as  used  herein,  shall  be 
deemed  to  mean  and  include  national  banks,  State  banks, 
trust  companies,  or  other  banks  or  banking  associations' 
doing  business  under  the  laws  of  the  United  States,  or  of 
any  State  of  the  United  States. 

The  words  "to  trade,"  as  used  herein,  shall  be  deemed 
to  mean — 

(a)  Pay,  satisfy,  compromise,  or  give  security  for 
the  payment  or  satisfaction  of  any  debt  or  obligation. 

(b)  Draw,  accept,  pay,  present  for  acceptance  or 
payment,  or  indorse  any  negotiable  instrument  or  chose  in 
action. 

(c)  Enter  into,  carry  on,  complete,  or  perform  any 
contract,  agreement,  or  obligation. 

(d)  Buy  or  sell,  loan  or  extend  credit,  trade  in,  deal 
with,  exchange,  transmit,  transfer,  assign,  or  otherwise 
dispose  of,  or  receive  any  form  of  property. 

(e)  To  have  any  form  of  business  or  commercial 
communication  or  intercourse  with. 

SEC.  3.     That  it  shall  be  unlawful— 

(a)  For  any  person  in  the  United  States,  except 
with  the  license  of  the  President,  granted  to  such  person, 
or  to  the  enemy,  or  ally  of  enemy,  as  provided  in  this  Act, 
to  trade,  or  attempt  to  trade,  either  directly  or  indirectly, 
with,  to,  or  from,  or  for,  or  on  account  of,  or  on  behalf  of, 
or  for  the  benefit  of,  any  other  person,  with  knowledge  or 
reasonable  cause  to  believe  that  such  other  person  is  an 
enemy  or  ally  of  enemy,  or  is  conducting  or  taking  part  in 
such  trade,  directly  or  indirectly,  for,  or  on  account  of,  or 
on  behalf  of,  or  for  the  benefit  of,  an  enemy  or  ally  of 
enemy. 

(b)  For  any  person,  except  with  the  license  of  the 
President,  to  transport  or  attempt  to  transport  into  or 

10 


from  the  United  States,  or  for  any  owner,  master,  or  other 
person  in  charge  of  a  vessel  of  American  registry  to  trans- 
port or  attempt  to  transport  from  any  place  to  any  other 
place,  any  subject  or  citizen  of  an  enemy  or  ally  of  enemy 
nation,  with  knowledge  or  reasonable  cause  to  believe 
that  the  person  transported  or  attempted  to  be  trans- 
ported is  such  subject  or  citizen. 

(c)  For  any  person  (other  than  a  person  in  the  serv- 
ice of  the  United  States  Government  or  of  the  Govern- 
ment of  any  nation,  except  that  of  an  enemy  or  ally  of 
enemy  nation,  and  other  than  such  persons  or  classes  of 
persons  as  may  be  exempted  hereunder  by  the  President 
or  by  such  person  as  he  may  direct),  to  send,  or  take  out 
of,  or  bring  into,  or  attempt  to  send,  or  take  out  of,  or 
bring  into  the  United  States,  any  letter  or  other  writing 
or  tangible  form  of  communication,  except  in  the  regular 
course  of  the  mail ;  and  it  shall  be  unlawful  for  any  person 
to  send,  take,  or  transmit,  or  attempt  to  send,  take,  or 
transmit  out  of  the  United  States,  any  letter  or  other 
writing,  book,  map,  plan,  or  other  paper,  picture,  or  any 
telegram,  cablegram,  or  wireless  message,  or  other  form 
of  communication  intended  for  or  to  be  delivered,  directly 
or  indirectly,  to  an  enemy  or  ally  of  enemy:  Provided, 
however,  That  any  person  may  send,  take,  or  transmit  out 
of  the  United  States  anything  herein  forbidden  if  he  shall 
first  submit  the  same  to  the  President,  or  to  such  officer 
as  the  President  may  direct,  and  shall  obtain  the  license 
or  consent  of  the  President,  under  such  rules  and  regula- 
tions, and  with  such  exemptions,  as  shall  be  prescribed  by 
the  President. 

(d)  Whenever,  during  the  present  war,  the  President 
shall  deem  that  the  public  safety  demands  it,  he  may 
cause  to  be  censored  under  such  rules  and  regulations  as 
he  may  from  time  to  time  establish,  communications  by 
mail,  cable,  radio,  or  other  means  of  transmission  passing 
between  the  United  States  and  any  foreign  country  he 
may  from  time  to  time  specify,  or  which  may  be  carried  by 
any  vessel  or  other  means  of  transportation  touching  at 
any  port,  place,  or  territory  of  the  United  States  and 
bound  to  or  from  any  foreign  country.     Any  person  who 

11 


willfully  evades  or  attempts  to  evade  the  submission  of 
any  such  communication  to  such  censorship  or  willfully 
uses  or  attempts  to  use  any  code  or  other  device  for  the 
purpose  of  concealing  from  such  censorship  the  intended 
meaning  of  such  communication  shall  be  punished  as 
provided  in  section  sixteen  of  this  Act. 

SEC.  4.  (a)  Every  enemy  or  ally  of  enemy  insurance 
or  reinsurance  company,  and  every  enemy  or  ally  of 
enemy,  doing  business  within  the  United  States  through 
an  agency  or  branch  office,  or  otherwise,  may,  within 
thirty  days  after  the  passage  of  this  Act,  apply  to  the 
President  for  a  license  to  continue  to  do  business;  and, 
within  thirty  days  after  such  application,  the  President 
may  enter  an  order  either  granting  or  refusing  to  grant 
such  license.  The  license,  if  granted,  may  be  temporary 
or  otherwise,  and  for  such  period  of  time,  and  may  contain 
such  provisions  and  conditions  regulating  the  business, 
agencies,  managers  and  trustees  and  the  control  and  dis- 
position of  the  funds  of  the  company,  or  of  such  enemy  or 
ally  of  enemy,  as  the  President  shall  deem  necessary  for 
the  safety  of  the  United  States;  and  any  license  granted 
hereunder  may  be  revoked  or  regranted  or  renewed  in  such 
manner  and  at  such  times  as  the  President  shall  determine: 
Provided,  however,  That  reasonable  notice  of  his  intent  to 
refuse  to  grant  a  license  or  to  revoke  a  license  granted  to 
any  reinsurance  company  shall  be  given  by  him  to  all  in- 
surance companies  incorporated  within  the  United  States 
and  known  to  the  President  to  be  doing  business  with  such 
reinsurance  company:  Provided  further,  That  no  insur- 
ance company,  organized  within  the  United  States,  shall 
be  obligated  to  continue  any  existing  contract,  entered 
into  prior  to  the  beginning  of  the  war,  with  any  enemy  or 
ally  of  enemy  insurance  or  reinsurance  company,  but  any 
such  company  may  abrogate  and  cancel  any  such  contract 
by  serving  thirty  days'  notice  in  writing  upon  the  Presi- 
dent of  its  election  to  abrogate  such  contract. 

For  a  period  of  thirty  days  after  the  passage  of  this 
Act,  and  further  pending  the  entry  of  such  order  by  the 
President,  after  application  made  by  any  enemy  or  ally  of 

12 


enemy  insurance  or  reinsurance  company,  within  such 
thirty  days  as  above  provided,  the  provisions  of  the 
President's  proclamation  of  April  sixth,  nineteen  hundred 
and  seventeen,  relative  to  agencies  in  the  United  States  of 
certain  insurance  companies,  as  modified  by  the  provisions 
of  the  President's  proclamation  of  July  thirteenth,  nine- 
teen hundred  and  seventeen,  relative  to  marine  and  war- 
risk  insurance,  shall  remain  in  full  force  and  effect  so  far 
as  it  applies  to  such  German  insurance  companies,  and  the 
conditions  of  said  proclamation  of  April  sixth,  nineteen 
hundred  and  seventeen,  as  modified  by  said  proclamation 
of  July  thirteenth,  nineteen  hundred  and  seventeen,  shall 
also  during  said  period  of  thirty  days  after  the  passage  of 
this  Act,  and  pending  the  order  of  the  President  as  herein 
provided,  apply  to  any  enemy  or  ally  of  enemy  insurance 
or  reinsurance  company,  anything  in  this  Act  to  the  con- 
trary notwithstanding.  It  shall  be  unlawful  for  any  en- 
emy or  ally  of  enemy  insurance  or  reinsurance  company, 
to  whom  license  is  granted,  to  transmit  out  of  the  United 
States  any  funds  belonging  to  or  held  for  the  benefit  ot 
such  company  or  to  use  any  such  funds  as  the  basis  for  the 
establishment  directly  or  indirectly  of  any  credit  within  or 
outside  of  the  United  States  to,  or  for  the  benefit  of,  or  on 
behalf  of,  or  on  account  of,  an  enemy  or  ally  of  enemy. 

For  a  period  of  thirty  days  after  the  passage  of  this 
Act,  and  further  pending  the  entry  of  such  order  by  the 
President,  after  application  made  within  such  thirty  days 
by  any  enemy  or  ally  of  enemy,  other  than  an  insurance 
or  reinsurance  company  as  above  provided,  it  shall  be 
lawful  for  such  enemy  or  ally  of  enemy  to  continue  to  do 
business  in  this  country  and  for  any  person  to  trade  with, 
to,  from,  for,  on  account  of,  on  behalf  of  or  for  the  benefit 
of  such  enemy  or  ally  of  enemy,  anything  in  this  Act  to  the 
contrary  notwithstanding:  Provided,  however,  That  the 
provisions  of  sections  three  and  sixteen  hereof  shall  apply 
to  any  act  or  to  any  attempted  act  of  transmission  or 
transfer  of  money  or  other  property  out  of  the  United 
States  and  to  the  use  or  attempted  use  of  such  money  or 
property  as  the  basis  for  the  establishment  of  any  credit 
within  or  outside  of  -the  United  States  to,  or  for   the 

13 


benefit  of,  or  on  behalf  of,  or  on  account  of,  an  enemy  or 
ally  of  enemy. 

If  no  license  is  applied  for  within  thirty  days  after  the 
passage  of  this  Act,  or  if  a  license  shall  be  refused  to  any 
enemy  or  ally  of  enemy,  whether  insurance  or  reinsurance 
company,  or  other  person,  making  application,  or  if  any 
license  granted  shall  be  revoked  by  the  President,  the 
provisions  of  sections  three  and  sixteen  hereof  shall  forth- 
with apply  to  all  trade  or  to  any  attempt  to  trade  with,  to, 
from,  for,  by,  on  account  of,  or  on  behalf  of,  or  for  the 
benefit  of  such  company  or  other  person:  Provided,  how- 
ever, That  after  such  refusal  or  revocation,  anything  in 
this  Act  to  the  contrary  notwithstanding,  it  shall  be  lawful 
for  a  policyholder  or  for  an  insurance  company,  not  an 
enemy  or  ally  of  enemy,  holding  insurance  or  having 
effected  reinsurance  in  or  with  such  enemy  or  ally  of 
enemy  insurance  or  reinsurance  company,  to  receive  pay- 
ment of,  and  for  such  enemy  or  ally  of  enemy  insurance  or 
reinsurance  company  to  pay  any  premium,  return  pre- 
mium, claim,  money,  security,  or  other  property  due  or 
which  may  become  due  on  or  in  respect  to  such  insurance 
or  reinsurance  in  force  at  the  date  of  such  refusal  or 
revocation  of  license ;  and  nothing  in  this  Act  shall  vitiate 
or  nullify  then  existing  policies  or  contracts  of  insurance 
or  reinsurance,  or  the  conditions  thereof;  and  any  such 
policyholder  or  insurance  company,  not  an  enemy  or  ally 
of  enemy,  having  any  claim  to  or  upon  money  or  other 
property  of  the  enemy  or  ally  of  enemy  insurance  or  rein- 
surance company  in  the  custody  or  control  of  the  alien 
property  custodian,  hereinafter  provided  for,  or  of  the 
Treasurer  of  the  United  States,  may  make  application  for 
the  payment  thereof  and  may  institute  suit  as  provided  in 
section  nine  hereof. 

(b)  That,  during  the  present  war,  no  enemy,  or 
ally  of  enemy,  and  no  partnership  of  which  he  is  a 
member  or  was  a  member  at  the  beginning  of  the  war, 
shall  for  any  purpose  assume  or  use  any  name  other  than 
that  by  which  such  enemy  or  partnership  was  ordinarily 
known  at  the  beginning  of  the  war,  except  under  license 
from  the  President. 

14 


Whenever,  during  the  present  war,  in  the  opinion  of 
the  President  the  public  safety  or  public  interest  requires 
the  President  may  prohibit  any  or  all  foreign  insurance 
companies  from  doing  business  in  the  United  States,  or 
the  President  may  license  such  company  or  companies  to 
do  business  upon  such  terms  as  he  may  deem  proper. 

SEC.  5.  (a)  That  the  President,  if  he  shall  find  it 
compatible  with  the  safety  of  the  United  States  and  with 
the  successful  prosecution  of  the  war,  may,  by  proclama- 
tion, suspend  the  provisions  of  this  Act  so  far  as  they  apply 
to  an  ally  of  enemy,  and  he  may  revoke  or  renew  such 
suspension  from  time  to  time;  and  the  President  may 
grant  licenses,  special  or  general,  temporary  or  otherwise, 
and  for  such  period  of  time  and  containing  such  provisions 
and  conditions  as  he  shall  prescribe,  to  any  person  or 
class  of  persons  to  do  business  as  provided  in  subsection 
(a)  of  section  four  hereof,  and  to  perform  any  act  made 
unlawful  without  such  license  in  section  three  hereof,  and 
to  file  and  prosecute  applications  under  subsection  (b) 
of  section  ten  hereof;  and  he  may  revoke  or  renew 
such  licenses  from  time  to  time,  if  he  shall  be  of  opinion 
that  such  grant  or  revocation  or  renewal  shall  be  com- 
patible with  the  safety  of  the  United  States  and  with  the 
successful  prosecution  of  the  war;  and  he  may  make  such 
rules  and  regulations,  not  inconsistent  with  law,  as  may 
be  necessary  and  proper  to  carry  out  the  provisions  of 
this  Act;  and  the  President  may  exercise  any  power  or 
authority  conferred  by  this  Act  through  such  officer  or 
officers  as  he  shall  direct. 

If  the  President  shall  have  reasonable  cause  to  be- 
lieve that  any  act  is  about  to  be  performed  in  violation  of 
section  three  hereof  he  shall  have  authority  to  order  the 
postponement  of  the  performance  of  such  act  for  a  period 
not  exceeding  ninety  days,  pending  investigation  of  the 
facts  by  him. 

(b)  That  the  President  may  investigate,  regulate, 
or  prohibit,  under  such  rules  and  regulations  as  he  may 
prescribe,  by  means  of  licenses  or  otherwise,  any  transac- 
tions in  foreign  exchange,  export  or  ear-markings  of  gold 

15 


or  silver  coin  or  bullion  or  currency,  transfers  of  credit  in 
any  form  (other  than  credits  relating  solely  to  transactions 
to  be  executed  wholly  within  the  United  States),  and 
transfers  of  evidences  of  indebtedness  or  of  the  ownership 
of  property  between  the  United  States  and  any  foreign 
country,  whether  enemy,  ally  of  enemy  or  otherwise,  or 
between  residents  of  one  or  more  foreign  countries,  by  any 
person  within  the  United  States;  and  he  may  require  any 
such  person  engaged  in  any  such  transaction  to  furnish, 
under  oath,  complete  information  relative  thereto,  in- 
cluding the  production  of  any  books  of  account,  con- 
tracts, letters  or  other  papers,  in  connection  therewith  in 
the  custody  or  control  of  such  person,  either  before  or 
after  such  transaction  is  completed. 

SEC.  6.  That  the  President  is  authorized  to  appoint, 
prescribe  the  duties  of,  and  fix  the  salary  (not  to  exceed 
$5,000  per  annum)  of  an  official  to  be  known  as  the  alien 
property  custodian,  who  shall  be  empowered  to  receive  all 
money  and  property  in  the  United  States  due  or  belonging 
to  an  enemy,  or  ally  of  enemy,  which  may  be  paid,  con- 
veyed, transferred,  assigned,  or  delivered  to  said  cus- 
todian under  the  provisions  of  this  Act;  and  to  hold, 
administer,  and  account  for  the  same  under  the  general 
direction  of  the  President  and  as  provided  in  this  Act. 
The  alien  property  custodian  shall  give  such  bond  or 
bonds,  and  in  such  form  and  amount,  and  with  such 
security  as  the  President  shall  prescribe.  The  President 
may  further  employ  in  the  District  of  Columbia  and  else- 
where and  fix  the  compensation  of  such  clerks,  attorneys, 
investigators,  accountants,  and  other  employees  as  he 
may  find  necessary  for  the  due  administration  of  the  pro- 
visions of  this  Act:  Provided,  That  such  clerks,  investiga- 
tors, accountants,  and  other  employees  shall  be  appointed 
from  lists  of  eligibles  to  be  supplied  by  the  Civil  Service 
Commission  and  in  accordance  with  the  civil-service  law: 
Provided  further,  That  the  President  shall  cause  a  detailed 
report  to  be  made  to  Congress  on  the  first  day  of  January 
of  each  year  of  all  proceedings  had  under  this  Act  during 
the  year  preceding.  Such  report  shall  contain  a  list  of  all 
persons  appointed  or  employed,  with  the  salary  or  com- 

16 


pensation  paid  to  each,  and  a  statement  of  the  different 
kinds  of  property  taken  into  custody  and  the  disposition 
made  thereof. 

SEC.  7.  (a)  That  every  corporation  incorporated 
within  the  United  States,  and  every  unincorporated  asso- 
ciation, or  company,  or  trustee,  or  trustees  within  the 
United  States,  issuing  shares  or  certificates  representing 
beneficial  interests,  shall,  under  such  rules  and  regulations 
as  the  President  may  prescribe  and,  within  sixty  days 
after  the  passage  of  this  Act,  and  at  such  other  times 
thereafter  as  the  President  may  require,  transmit  to  the 
alien  property  custodian  a  full  list,  duly  sworn  to,  of  every 
officer,  director,  or  stockholder  known  to  be,  or  whom  the 
representative  of  such  corporation,  association,  company, 
or  trustee  has  reasonable  cause  to  believe  to  be  an  enemy 
or  ally  of  enemy  resident  within  the  territory,  or  a  subject 
or  citizen  residing  outside  of  the  United  States,  of  any 
nation  with  which  the  United  States  is  at  war,  or  resident 
within  the  territory,  or  a  subject  or  citizen  residing  outside 
of  the  United  States,  of  any  ally  of  any  nation  with  which 
the  United  States  is  at  war,  together  with  the  amount  of 
stock  or  shares  owned  by  each  such  officer,  director,  or 
stockholder,  or  in  which  he  has  any  interest. 

The  President  may  also  require  a  similar  list  to  be 
transmitted  of  all  stock  or  shares  owned  on  February  third, 
nineteen  hundred  and  seventeen,  by  any  person  now  de- 
fined as  an  enemy  or  ally  of  enemy,  or  in  which  any  such 
person  had  any  interest;  and  he  may  also  require  a  list  to 
be  transmitted  of  all  cases  in  which  said  corporation, 
association,  company,  or  trustee  has  reasonable  cause  to 
believe  that  the  stock  or  shares  on  February  third,  nine- 
teen hundred  and  seventeen,  were  owned  or  are  owned  by 
such  enemy  or  ally  of  enemy,  though  standing  on  the 
books  in  the  name  of  another:  Provided,  however,  That 
the  name  of  any  such  officer,  director,  or  stockholder  shall 
be  stricken  permanently  or  temporarily  from  such  list  by 
the  alien  property  custodian  when  he  shall  be  satisfied 
that  he  is  not  such  enemy  or  ally  of  enemy. 

Any  person  in  the  United  States  who  holds  or  has  or 
shall  hold  or  have  custody  or  control  of  any  property 

17 


beneficial  or  otherwise,  alone  or  jointly  with  others,  of,  for, 
or  on  behalf  of  an  enemy  or  ally  of  enemy,  or  of  any  person 
whom  he  may  have  reasonable  cause  to  believe  to  be  an 
enemy  or  ally  of  enemy  and  any  person  in  the  United 
States  who  is  or  shall  be  indebted  in  any  way  to  an  enemy 
or  ally  of  enemy,  or  to  any  person  whom  he  may  have 
reasonable  cause  to  believe  to  be  an  enemy  or  ally  of 
enemy,  shall,  with  such  exceptions  and  under  such  rules 
and  regulations  as  the  President  shall  prescribe,  and 
within  thirty  days  after  the  passage  of  this  Act,  or  within 
thirty  days  after  such  property  shall  come  within  his 
custody  or  control,  or  after  such  debt  shall  become  due, 
report  the  fact  to  the  alien-property  custodian  by  written 
statement  under  oath,  containing  such  particulars  as  said 
custodian  shall  require.  The  President  may  also  require  a 
similar  report  of  all  property  so  held,  of,  for,  or  on  behalf 
of,  and  of  all  debts  so  owed  to,  any  person  now  defined  as 
an  enemy  or  ally  of  enemy,  on  February  third,  nineteen 
hundred  and  seventeen:  Provided,  That  the  name  of  any 
person  shall  be  stricken  from  the  said  report  by  the  alien- 
property  custodian,  either  temporarily  or  permanently, 
when  he  shall  be  satisfied  that  such  person  is  not  an  enemy 
or  ally  of  enemy. 

The  President  may  extend  the  time  for  filing  the  lists 
or  reports  required  by  this  section  for  an  additional  period 
not  exceeding  ninety  days. 

(b)  Nothing  in  this  Act  contained  shall  render  valid 
or  legal,  or  be  construed  to  recognize  as  valid  or  legal,  any 
act  or  transaction  constituting  trade  with,  to,  from,  for 
or  on  account  of,  or  on  behalf  or  for  the  benefit  of  an  enemy 
performed  or  engaged  in  since  the  beginning  of  the  war 
and  prior  to  the  passage  of  this  Act,  or  any  such  act  or 
transaction  hereafter  performed  or  engaged  in  except  as 
authorized  hereunder,  which  would  otherwise  have  been 
or  be  void,  illegal,  or  invalid  at  law.  No  conveyance, 
transfer,  delivery,  payment,  or  loan  of  money  or  other 
property,  in  violation  of  section  three  hereof,  made  after 
the  passage  of  this  Act  and  not  under  license  as  herein 
provided  shall  confer  or  create  any  right  or  remedy  in  re- 
spect thereof;  and  no  person  shall  by  virtue  of  any  assign- 

18 


ment,  indorsement,  or  delivery  to  him  of  any  debt,  bill, 
note,  or  other  obligation  or  chose  in  action  by,  from,  or  on 
behalf  of,  or  on  account  of,  or  for  the  benefit  of  an  enemy 
or  ally  of  enemy  have  any  right  or  remedy  against  the 
debtor,  obligor,  or  other  person  liable  to  pay,  fulfill,  or 
perform  the  same  unless  said  assignment,  indorsement,  or 
delivery  was  made  prior  to  the  beginning  of  the  war  or 
shall  be  made  under  license  as  herein  provided,  or  unless, 
if  made  after  the  beginning  of  the  war  and  prior  to  the  date 
of  passage  of  this  Act,  the  person  to  whom  the  same  was 
made  shall  prove  lack  of  knowledge  and  of  reasonable 
cause  to  believe  on  his  part  that  the  same  was  made  by, 
from  or  on  behalf  of,  or  on  account  of,  or  for  the  benefit 
of  an  enemy  or  ally  of  enemy;  and  any  person  who  know- 
ingly pays,  discharges,  or  satisfies  any  such  debt,  note, 
bill,  or  other  obligation  or  chose  in  action  shall,  on  con- 
viction thereof,  be  deemed  to  violate  section  three  hereof: 
Provided,  That  nothing  in  this  Act  contained  shall  prevent 
the  carrying  out,  completion,  or  performance  of  any  con- 
tract, agreement,  or  obligation  originally  made  with  or 
entered  into  by  an  enemy  or  ally  of  enemy  where,  prior  to 
the  beginning  of  the  war  and  not  in  contemplation  thereof, 
the  interest  of  such  enemy  or  ally  of  enemy  devolved  by 
assignment  or  otherwise  upon  a  person  not  an  enemy  or 
ally  of  enemy,  and  no  enemy  or  ally  of  enemy  will  be 
benefited  by  such  carrying  out,  completion,  or  perform- 
ance otherwise  than  by  release  from  obligation  thereunder. 

Nothing  in  this  Act  shall  be  deemed  to  prevent  pay- 
ment of  money  belonging  or  owing  to  an  enemy  or  ally  of 
enemy  to  a  person  within  the  United  States,  not  an  enemy 
or  ally  of  enemy,  for  the  benefit  of  such  person  or  of  any 
other  person  within  the  United  States,  not  an  enemy  or 
ally  of  enemy,  if  the  funds  so  paid  shall  have  been  received 
prior  to  the  beginning  of  the  war  and  such  payments  arise 
out  of  transactions  entered  into  prior  to  the  beginning  of 
the  war,  and  not  in  contemplation  thereof:  Provided, 
That  such  payment  shall  not  be  made  without  the  license 
of  the  President,  general  or  special,  as  provided  in  this  Act. 

Nothing  in  this  Act  shall  be  deemed  to  authorize  the 
prosecution  of  any  suit  or  action  at  law  or  in  equity  in  any 

19 


court  within  the  United  States  by  an  enemy  or  ally  of 
enemy  prior  to  the  end  of  the  war,  except  as  provided  in 
section  ten  hereof:  Provided,  however,  That  an  enemy  or 
ally  of  enemy  licensed  to  do  business  under  this  Act  may 
prosecute  and  maintain  any  such  suit  or  action  so  far  as 
the  same  arises  solely  out  of  the  business  transacted 
within  the  United  States  under  such  license  and  so  long  as 
such  license  remains  in  full  force  and  effect:  And,  provided 
further,  That  an  enemy  or  ally  of  enemy  may  defend  by 
counsel  any  suit  in  equity  or  action  at  law  which  may  be 
brought  against  him. 

Receipt  of  notice  from  the  President  to  the  effect 
that  he  has  reasonable  ground  to  believe  that  any  person 
is  an  enemy  or  ally  of  enemy  shall  be  prima  facie  defense 
to  any  one  receiving  the  same,  in  any  suit  or  action  at  law 
or  in  equity  brought  or  maintained,  or  to  any  right  or 
set-off  or  recoupment  asserted  by,  such  person  and  based 
on  failure  to  complete  or  perform  since  the  beginning  of 
the  war  any  contract  or  other  obligation.  In  any  prose- 
cution under  section  sixteen  hereof,  proof  of  receipt  of 
notice  from  the  President  to  the  effect  that  he  has  reason- 
able cause  to  believe  that  any  person  is  an  enemy  or  ally 
of  enemy  shall  be  prima  facie  evidence  that  the  person 
receiving  such  notice  has  reasonable  cause  to  believe  such 
other  person  to  be  an  enemy  or  ally  of  enemy  within  the 
meaning  of  section  three  hereof. 

(c)  If  the  President  shall  so  require,  any  money  or 
other  property  owing  or  belonging  to,  or  held  for,  by,  on 
account  of,  or  on  behalf  of,  or  for  the  benefit  of  an  enemy 
or  ally  of  enemy  not  holding  a  license  granted  by  the 
President  hereunder,  which  the  President  after  investiga- 
tion shall  determine  is  so  owing  or  so  belongs  or  is  so  held, 
shall  be  conveyed,  transferred,  assigned,  delivered,  or  paid 
over  to  the  alien  property  custodian. 

(d)  If  not  required  to  pay,  convey,  transfer,  assign, 
or  deliver  under  the  provisions  of  subsection  (c)  hereof, 
any  person  not  an  enemy  or  ally  of  enemy  who  owes  to,  or 
holds  for,  or  on  account  of,  or  on  behalf  of,  or  for  the 
benefit  of  an  enemy  or  of  an  ally  of  enemy  not  holding  a 
license  granted  by  the  President  hereunder,  any  money  or 

20 


other  property,  or  to  whom  any  obligation  or  form  of 
liability  to  such  enemy  or  ally  of  enemy  is  presented  for 
payment,  may,  at  his  option,  with  the  consent  of  the 
President,  pay,  convey,  transfer,  assign,  or  deliver  to  the 
alien  property  custodian  said  money  or  other  property 
under  such  rules  and  regulations  as  the  President  shall 
prescribe. 

(e)  No  person  shall  be  held  liable  in  any  court  for  or 
in  respect  to  anything  done  or  omitted  in  pursuance  of  any 
order,  rule,  or  regulation  made  by  the  President  under  the 
authority  of  this  Act. 

Any  payment,  conveyance,  transfer,  assignment,  or 
delivery  of  money  or  property  made  to  the  alien  property 
custodian  hereunder  shall  be  a  full  acquittance  and  dis- 
charge for  all  purposes  of  the  obligation  of  the  person 
making  the  same  to  the  extent  of  same.  The  alien  prop- 
erty custodian  and  such  other  persons  as  the  President 
may  appoint  shall  have  power  to  execute,  acknowledge, 
and  deliver  any  such  instrument  or  instruments  as  may  be 
necessary  or  proper  to  evidence  upon  the  record  or  other- 
wise such  acquittance  and  discharge  and  shall,  in  case  of 
payment  to  the  alien  property  custodian  of  any  debt  or 
obligation  owed  to  an  enemy  or  ally  of  enemy,  deliver  up 
any  notes,  bonds,  or  other  evidences  of  indebtedness  or 
obligation,  or  any  security  therefor  in  which  such  enemy 
or  ally  of  enemy  had  any  right  or  interest  that  may  have 
come  into  the  possession  of  the  alien  property  custodian, 
with  like  effect  as  if  he  or  they,  respectively,  were  duly 
appointed  by  the  enemy  or  ally  of  enemy,  creditor,  or 
obligee.  The  President  shall  issue  to  every  person  so 
appointed  a  certificate  of  the  appointment  and  authority 
of  such  person,  and  such  certificate  shall  be  received  in 
evidence  in  all  courts  within  the  United  States.  When- 
ever any  such  certificate  of  authority  shall  be  offered  to 
any  registrar,  clerk,  or  other  recording  officer,  Federal  or 
otherwise,  within  the  United  States,  such  officer  shall 
record  the  same  in  like  manner  as  a  power  of  attorney,  and 
such  record  or  a  duly  certified  copy  thereof  shall  be  re- 
ceived in  evidence  in  all  courts  of  the  United  States  or 
other  courts  within  the  United  States. 

21 


SEC.  8.  (a)  That  any  person  not  an  enemy  or  ally 
of  enemy  holding  a  lawful  mortgage,  pledge,  or  lien,  or 
other  right  in  the  nature  of  security  in  property  of  an 
enemy  or  ally  of  enemy  which,  by  law  or  by  the  terms  of 
the  instrument  creating  such  mortgage,  pledge,  or  lien, 
or  right,  may  be  disposed  of  on  notice  or  presentation  or 
demand,  and  any  person  not  an  enemy  or  ally  of  enemy 
who  is  a  party  to  any  lawful  contract  with  an  enemy  or 
ally  of  enemy,  the  terms  of  which  provide  for  a  termination 
thereof  upon  notice  or  for  acceleration  of  maturity  on 
presentation  or  demand,  may  continue  to  hold  said  prop- 
erty, and,  after  default,  may  dispose  of  the  property  in 
accordance  with  law  or  may  terminate  or  mature  such 
contract  by  notice  or  presentation  or  demand  served  or 
made  on  the  alien  property  custodian  in  accordance  with 
the  law  and  the  terms  of  such  instrument  or  contract 
and  under  such  rules  and  regulations  as  the  President 
shall  prescribe;  and  such  notice  and  such  presentation 
and  demand  shall  have,  in  all  respects,  the  same  force 
and  effect  as  if  duly  served  or  made  upon  the  enemy  or 
ally  of  enemy  personally:  Provided,  That  no  such  rule  or 
regulation  shall  require  that  notice  or  presentation  or 
demand  shall  be  served  or  made  in  any  case  in  which,  by 
law  or  by  the  terms  of  said  instrument  or  contract,  no 
notice,  presentation,  or  demand  was,  prior  to  the  passage 
of  this  Act,  required ;  and  that  in  case  where,  by  law  or  by 
the  terms  of  such  instrument  or  contract,  notice  is  re- 
quired, no  longer  period  of  notice  shall  be  required: 
Provided  further,  That  if,  on  any  such  disposition  of  prop- 
erty, a  surplus  shall  remain  after  the  satisfaction  of  the 
mortgage,  pledge,  lien,  or  other  right  in  the  nature  of 
security,  notice  of  that  fact  shall  be  given  to  the  President 
pursuant  to  such  rules  and  regulations  as  he  may  pre- 
scribe, and  such  surplus  shall  be  held  subject  to  his  further 
order. 

(b)  That  any  contract  entered  into  prior  to  the  be- 
ginning of  the  war  between  any  citizen  of  the  United 
States  or  any  corporation  organized  within  the  United 
States,  and  an  enemy  or  ally  of  an  enemy,  the  terms  of 
which  provide  for  the  delivery,  during  or  after  any  war  in 

22 


which  a  present  enemy  or  ally  of  enemy  nation  has  been 
or  is  now  engaged,  of  anything  produced,  mined,  or  manu- 
factured in  the  United  States,  may  be  abrogated  by  such 
citizen  or  corporation  by  serving  thirty  days'  notice  in 
writing  upon  the  alien  property  custodian  of  his  or  its 
election  to  abrogate  such  contract. 

(c)  The  running  of  any  statute  of  limitations  shall 
be  suspended  with  reference  to  the  rights  or  remedies  on 
any  contract  or  obligation  entered  into  prior  to  the  be- 
ginning of  the  war  between  parties  neither  of  whom  is  an 
enemy  or  ally  of  enemy,  and  containing  any  promise  to 
pay  or  liability  for  payment  which  is  evidenced  by  drafts 
or  other  commercial  paper  drawn  against  or  secured  by 
funds  or  other  property  situated  in  an  enemy  or  ally  of 
enemy  country,  and  no  suit  shall  be  maintained  on  any 
such  contract  or  obligation  in  any  court  within  the  United 
States  until  after  the  end  of  the  war,  or  until  the  said  funds 
or  property  shall  be  released  for  the  payment  or  satisfac- 
tion of  such  contract  or  obligation:  Provided,  however, 
That  nothing  herein  contained  shall  be  construed  to 
prevent  the  suspension  of  the  running  of  the  statute  of 
limitations  in  all  other  cases  where  such  suspension  would 
occur  under  existing  law. 

SEC.  9.  That  any  person,  not  an  enemy,  or  ally  of 
enemy,  claiming  any  interest,  right,  or  title  in  any  money 
or  other  property  which  may  have  been  conveyed,  trans- 
ferred, assigned,  delivered,  or  paid  to  the  alien  property 
custodian  hereunder,  and  held  by  him  or  by  the  Treasurer 
of  the  United  States,  or  to  whom  any  debt  may  be  owing 
from  an  enemy,  or  ally  of  enemy,  whose  property  or  any 
part  thereof  shall  have  been  conveyed,  transferred,  as- 
signed, delivered,  or  paid  to  the  alien  property  custodian 
hereunder,  and  held  by  him  or  by  the  Treasurer  of  the 
United  States,  may  file  with  the  said  custodian  a  notice  of 
his  claim  under  oath  and  in  such  form  and  containing  such 
particulars  as  the  said  custodian  shall  require;  and  the 
President,  if  application  is  made  therefor  by  the  claimant, 
may,  with  the  assent  of  the  owner  of  said  property  and  of 
all  persons  claiming  any  right,  title,  or  interest  therein, 
order  the  payment,  conveyance,  transfer,  assignment  or 

23 


delivery  to  said  claimant  of  the  money  or  other  property 
so  held  by  the  alien  property  custodian  or  by  the  Treas- 
urer of  the  United  States  or  of  the  interest  therein  to 
which  the  President  shall  determine  said  claimant  is 
entitled:  Provided,  That  no  such  order  by  the  President 
shall  bar  any  person  from  the  prosecution  of  any  suit  at 
law  or  in  equity  against  the  claimant  to  establish  any 
right,  title  or  interest  which  he  may  have  in  such  money 
or  other  property.  If  the  President  shall  not  so  order 
within  sixty  days  after  the  filing  of  such  application,  or  if 
the  claimant  shall  have  filed  the  notice  as  above  required 
and  shall  have  made  no  application  to  the  President,  said 
claimant  may,  at  any  time  before  the  expiration  of  six 
months  after  the  end  of  the  war,  institute  a  suit  in  equity 
in  the  district  court  of  the  United  States  for  the  district  in 
which  such  claimant  resides,  or,  if  a  corporation,  where  it 
has  its  principal  place  of  business  (to  which  suit  the  alien 
property  custodian  or  the  Treasurer  of  the  United  States, 
as  the  case  may  be,  shall  be  made  a  party  defendant),  to 
establish  the  interest,  right,  title,  or  debt  so  claimed,  and 
if  suit  shall  be  so  instituted  then  the  money  or  other 
property  of  the  enemy,  or  ally  of  enemy,  against  whom 
such  interest,  right,  or  title  is  asserted,  or  debt  claimed, 
shall  be  retained  in  the  custody  of  the  alien  property 
custodian,  or  in  the  Treasury  of  the  United  States,  as 
provided  in  this  Act,  and  until  any  final  judgment  or 
decree  which  shall  be  entered  in  favor  of  the  claimant  shall 
be  fully  satisfied  by  payment  or  conveyance,  transfer, 
assignment,  or  delivery  by  the  defendant  or  by  the  alien 
property  custodian  or  Treasurer  of  the  United  States  on 
order  of  the  court,  or  until  final  judgment  or  decree 
shall  be  entered  against  the  claimant,  or  suit  otherwise 
terminated. 

Except  as  herein  provided,  the  money  or  other  prop- 
erty conveyed,  transferred,  assigned,  delivered,  or  paid  to 
the  alien  property  custodian  shall  not  be  liable  to  lien, 
attachment,  garnishment,  trustee  process,  or  execution, 
or  subject  to  any  order  or  decree  of  any  court. 

This  section  shall  not  apply,  however,  to  money  paid 
to  the  alien  property  custodian  under  section  ten  hereof. 

24 


SEC.  10.  That  nothing  contained  in  this  Act  shall  be 
held  to  make  unlawful  any  of  the  following  Acts: 

(a)  An  enemy,  or  ally  or  enemy,  may  file  and  prose- 
cute in  the  United  States  an  application  for  letters  patent, 
or  for  registration  of  trade-mark,  print,  label,  or  copy- 
right, and  may  pay  any  fees  therefor  in  accordance  with 
and  as  required  by  the  provisions  of  existing  law  and  fees 
for  attorneys  or  agents  for  filing  and  prosecuting  such 
applications.  Any  such  enemy,  or  ally  of  enemy,  who  is 
unable  during  war,  or  within  six  months  thereafter,  on 
account  of  conditions  arising  out  of  war,  to  file  any  such 
application,  or  to  pay  any  official  fee,  or  to  take  any  action 
required  by  law  within  the  period  prescribed  by  law,  may 
be  granted  an  extension  of  nine  months  beyond  the  ex- 
piration of  said  period,  provided  the  nation  of  which  the 
said  applicant  is  a  citizen,  subject,  or  corporation  shall 
extend  substantially  similar  privileges  to  citizens  and 
corporations  of  the  United  States. 

(b)  Any  citizen  of  the  United  States,  or  any  cor- 
poration organized  within  the  United  States,  may,  when 
duly  authorized  by  the  President,  pay  to  an  enemy  or  ally 
of  enemy  any  tax,  annuity,  or  fee  which  may  be  required 
by  the  laws  of  such  enemy  or  ally  of  enemy  nation  in 
relation  to  patents  and  trade-marks,  prints,  labels,  and 
copyrights;  and  any  such  citizen  or  corporation  may  file 
and  prosecute  an  application  for  letters  patent  or  for 
registration  of  trade-mark,  print,  label,  or  copyright  in 
the  country  of  an  enemy,  or  of  an  ally  of  enemy  after  first 
submitting  such  application  to  the  President  and  receiving 
license  so  to  file  and  prosecute,  and  to  pay  the  fees  re- 
quired by  law  and  customary  agents'  fees,  the  maximum 
amount  of  which  in  each  case  shall  be  subject  to  the  con- 
trol of  the  President. 

(c)  Any  citizen  of  the  United  States  or  any  corpora- 
tion organized  within  the  United  States  desiring  to  manu- 
facture, or  cause  to  be  manufactured,  a  machine,  manu- 
facture, composition  of  matter,  or  design,  or  to  carry  on, 
or  cause  to  be  carried  on,  a  process  under  any  patent  or  to 
use  any  trade-mark,  print,  label,  or  copyrighted  matter 
owned  or  controlled  by  an  enemy  or  ally  of  enemy  at  any 

25 


time  during  the  existence  of  a  state  of  war  may  apply  to 
the  President  for  a  license;  and  the  President  is  hereby 
authorized  to  grant  such  a  license,  nonexclusive  or  ex- 
clusive as  he  shall  deem  best,  provided  he  shall  be  of  the 
opinion  that  such  grant  is  for  the  public  welfare,  and  that 
the  applicant  is  able  and  intends  in  good  faith  to  manu- 
facture, or  cause  to  be  manufactured,  the  machine,  manu- 
facture, composition  of  matter,  or  design,  or  to  carry  on, 
or  cause  to  be  carried  on,  the  process  or  to  use  the  trade- 
mark, print,  label,  or  copyrighted  matter.  The  President 
may  prescribe  the  conditions  of  this  license,  including  the 
fixing  of  prices  of  articles  and  products  necessary  to  the 
health  of  the  military  and  naval  forces  of  the  United 
States  or  the  successful  prosecution  of  the  war,  and  the 
rules  and  regulations  under  which  such  license  may  be 
granted  and  the  fee  which  shall  be  charged  therefor,  not 
exceeding  $100,  and  not  exceeding  one  per  centum  of  the 
fund  deposited  as  hereinafter  provided.  Such  license 
shall  be  a  complete  defense  to  any  suit  at  law  or  in  equity 
instituted  by  the  enemy  or  ally  of  enemy  owners  of  the 
letters  patent,  trade-mark,  print,  label  or  copyright,  or 
otherwise,  against  the  licensee  for  infringement  or  for  dam- 
ages, royalty,  or  other  money  award  on  account  of  any- 
thing done  by  the  licensee  under  such  license,  except  as 
provided  in  subsection  (f)  hereof. 

(d)  The  licensee  shall  file  with  the  President  a  full 
statement  of  the  extent  of  the  use  and  enjoyment  of  the 
license,  and  of  the  prices  received  in  such  form  and  at  such 
stated  periods  (at  least  annually)  as  the  President  may 
prescribe ;  and  the  licensee  shall  pay  at  such  times  as  may 
be  required  to  the  alien  property  custodian  not  to  exceed 
five  per  centum  of  the  gross  sums  received  by  the  licensee 
from  the  sale  of  said  inventions  or  use  of  the  trade-mark, 
print,  label  or  copyrighted  matter,  or,  if  the  President  shall 
so  order,  five  per  centum  of  the  value  of  the  use  of  such 
inventions,  trade-marks,  prints,  labels  or  copyrighted 
matter  to  the  licensee  as  established  by  the  President; 
and  sums  so  paid  shall  be  deposited  by  said  alien  property 
custodian  forthwith  in  the  Treasury  of  the  United  States 
as  a  trust  fund  for  the  said  licensee  and  for  the  owner  of 

26 


the  said  patent,  trade-mark,  print,  label  or  copyright 
registration  as  hereinafter  provided,  to  be  paid  from  the 
Treasury  upon  order  of  the  court,  as  provided  in  subdivi- 
sion (f)  of  this  section,  or  upon  the  direction  of  the  alien 
property  custodian. 

(e)  Unless  surrendered  or  terminated  as  provided  in 
this  Act,  any  license  granted  hereunder  shall  continue  dur- 
ing the  term  fixed  in  the  license  or  in  the  absence  of  any 
such  limitation  during  the  term  of  the  patent,  trade-mark, 
print,  label,  or  copyright  registration  under  which  it  is 
granted.  Upon  violation  by  the  licensee  of  any  of  the 
provisions  of  this  Act,  or  of  the  conditions  of  the  license, 
the  President  may,  after  due  notice  and  hearing,  cancel 
any  license  granted  by  him. 

(f)  The  owner  of  any  patent,  trade-mark,  print, 
label,  or  copyright  under  which  a  license  is  granted  here- 
under may,  after  the  end  of  the  war  and  until  the  expira- 
tion of  one  year  thereafter,  file  a  bill  in  equity  against  the 
licensee  in  the  district  court  of  the  United  States  for  the 
district  in  which  the  said  licensee  resides,  or,  if  a  corpora- 
tion, in  which  it  has  its  principal  place  of  business  (to 
which  suit  the  Treasurer  of  the  United  States  shall  be 
made  a  party),  for  recovery  from  the  said  licensee  for  all 
use  and  enjoyment  of  the  said  patented  invention,  trade- 
mark, print,  label,  or  copyrighted  matter:  Provided, 
however,  That  whenever  suit  is  brought,  as  above,  notice 
shall  be  filed  with  the  alien  property  custodian  within 
thirty  days  after  date  of  entry  of  suit:  Provided  further, 
That  the  licensee  may  make  any  and  all  defenses  which 
would  be  available  were  no  license  granted.  The  court 
on  due  proceedings  had  may  adjudge  and  decree  to  the 
said  owner  payment  of  a  reasonable  royalty.  The 
amount  of  said  judgment  and  decree,  when  final,  shall  be 
paid  on  order  of  the  court  to  the  owner  of  the  patent  from 
the  fund  deposited  by  the  licensee,  so  far  as  such  deposit 
will  satisfy  said  judgment  and  decree;  and  the  said  pay- 
ment shall  be  in  full  or  partial  satisfaction  of  said  judg- 
ment and  decree,  as  the  facts  may  appear;  and  if,  after 
payment  of  all  such  judgments  and  decrees,  there  shall 
remain  any  balance  of  said  deposit,  such  balance  shall  be 

27 


repaid  to  the  licensee  on  order  of  the  alien  property  custo- 
dian. If  no  suit  is  brought  within  one  year  after  the  end 
of  the  war,  or  no  notice  is  filed  as  above  required,  then  the 
licensee  shall  not  be  liable  to  make  any  further  deposits, 
and  all  funds  deposited  by  him  shall  be  repaid  to  him  on 
order  of  the  alien  property  custodian.  Upon  entry  of 
suit  and  notice  filed  as  above  required,  or  upon  repayment 
of  funds  as  above  provided,  the  liability  of  the  licensee  to 
make  further  reports  to  the  President  shall  cease. 

If  suit  is  brought  as  above  provided,  the  court  may, 
at  any  time,  terminate  the  license,  and  may,  in  such  event, 
issue  an  injunction  to  restrain  the  licensee  from  infringe- 
ment thereafter,  or  the  court,  in  case  the  licensee,  prior  to 
suit,  shall  have  made  investment  of  capital  based  on 
possession  of  the  license,  may  continue  the  license  for  such 
period  and  upon  such  terms  and  with  such  royalties  as  it 
shall  find  to  be  just  and  reasonable. 

(g)  Any  enemy,  or  ally  of  enemy,  may  institute  and 
prosecute  suits  in  equity  against  any  person  other  than  a 
licensee  under  this  Act  to  enjoin  infringement  of  letters 
patent,  trade-mark,  print,  label,  and  copyrights  in  the 
United  States  owned  or  controlled  by  said  enemy  or  ally 
of  enemy,  in  the  same  manner  and  to  the  extent  that  he 
would  be  entitled  so  to  do  if  the  United  States  was  not  at 
war:  Provided,  That  no  final  judgment  or  decree  shall  be 
entered  in  favor  of  such  enemy  or  ally  of  enemy  by  any 
court  except  after  thirty  days'  notice  to  the  alien  property 
custodian,  such  notice  shall  be  in  writing  and  shall  be 
served  in  the  same  manner  as  civil  process  of  Federal 
courts. 

(h)  All  powers  of  attorney  heretofore  or  hereafter 
granted  by  an  enemy  or  ally  of  enemy  to  any  person 
within  the  United  States,  in  so  far  as  they  may  be  requisite 
to  the  performance  of  acts  authorized  in  subsections  (a) 
and  (g)  of  this  section  shall  be  valid. 

(i)  Whenever  the  publication  of  an  invention  by  the 
granting  of  a  patent  may,  in  the  opinion  of  the  President, 
be  detrimental  to  the  public  safety  or  defense,  or  may 
assist  the  enemy  or  endanger  the  successful  prosecution 
of  the  war,  he  may  order  that  the  invention  be  kept  secret 

28 


and  withhold  the  grant  of  a  patent  until  the  end  of  the 
war:  Provided,  That  the  invention  disclosed  in  the  appli- 
cation for  said  patent  may  be  held  abandoned  upon  it 
being  established  before  or  by  the  Commissioner  of 
Patents  that,  in  violation  of  said  order,  said  invention  has 
been  published  or  that  an  application  for  a  patent  therefor 
has  been  filed  in  any  other  country,  by  the  inventor  or  his 
assigns  or  legal  representatives,  without  the  consent  or 
approval  of  the  commissioner  or  under  a  license  of  the 
President. 

When  an  applicant  whose  patent  is  withheld  as  herein 
provided  and  who  faithfully  obeys  the  order  of  the  Presi- 
dent above  referred  to  shall  tender  his  invention  to  the 
Government  of  the  United  States  for  its  use,  he  shall,  if 
he  ultimately  receives  a  patent,  have  the  right  to  sue  for 
compensation  in  the  Court  of  Claims,  such  right  to  com- 
pensation to  begin  from  the  date  of  the  use  of  the  inven- 
tion by  the  Government. 

SEC.  11.  Whenever  during  the  present  war  the 
President  shall  find  that  the  public  safety  so  requires  and 
shall  make  proclamation  thereof  it  shall  be  unlawful  to 
import  into  the  United  States  from  any  country  named  in 
such  proclamation  any  article  or  articles  mentioned  in 
such  proclamation  except  at  such  time  or  times,  and  under 
such  regulations  or  orders,  and  subject  to  such  limitations 
and  exceptions  as  the  President  shall  prescribe,  until 
otherwise  ordered  by  the  President  or  by  Congress: 
Provided,  however,  That  no  preference  shall  be  given  to 
the  ports  of  one  State  over  those  of  another. 

SEC.  12.  That  all  moneys  (including  checks  and 
drafts  payable  on  demand)  paid  to  or  received  by  the  alien 
property  custodian  pursuant  to  this  Act  shall  be  deposited 
forthwith  in  the  Treasury  of  the  United  States,  and  may 
be  invested  and  reinvested  by  the  Secretary  of  the  Treas- 
ury in  United  States  bonds  or  United  States  certificates  of 
indebtedness,  under  such  rules  and  regulations  as  the 
President  shall  prescribe  for  such  deposit,  investment, 
and  sale  of  securities ;  and  as  soon  after  the  end  of  the 
war  as  the  President  shall  deem  practicable,  such  secu- 

29 


rities  shall  be  sold  and  the  proceeds  deposited  in  the 
Treasury. 

All  other  property  of  an  enemy,  or  ally  of  enemy, 
conveyed,  transferred,  assigned,  delivered,  or  paid  to  the 
alien  property  custodian  hereunder  shall  be  safely  held 
and  administered  by  him  except  as  hereinafter  provided; 
and  the  President  is  authorized  to  designate  as  a  deposi- 
tary, or  depositaries,  of  property  of  an  enemy  or  ally  of 
enemy,  any  bank,  or  banks,  or  trust  company,  or  trust 
companies,  or  other  suitable  depositary  or  depositaries, 
located  and  doing  business  in  the  United  States.  The 
alien  property  custodian  may  deposit  with  such  designated 
depositary  or  depositaries,  or  with  the  Secretary  of  the 
Treasury,  any  stocks,  bonds,  notes,  time  drafts,  time  bills 
of  exchange,  or  other  securities,  or  property  (except 
money  or  checks  or  drafts  payable  on  demand  which  are 
required  to  be  deposited  with  the  Secretary  of  the  Treas- 
ury) and  such  depositary  or  depositaries  shall  be  author- 
ized and  empowered  to  collect  any  dividends  or  interest 
or  income  that  may  become  due  and  any  maturing  obliga- 
tions held  for  the  account  of  such  custodian.  Any  moneys 
collected  on  said  account  shall  be  paid  and  deposited 
forthwith  by  said  depositary  or  by  the  alien  property 
custodian  into  the  Treasury  of  the  United  States  as  here- 
inbefore provided. 

The  President  shall  require  all  such  designated  de- 
positaries to  execute  and  file  bonds  sufficient  in  his  judg- 
ment to  protect  property  on  deposit,  such  bonds  to  be 
conditioned  as  he  may  direct. 

The  alien  property  custodian  shall  be  vested  with  all 
of  the  powers  of  a  common-law  trustee  in  respect  of  all 
property,  other  than  money,  which  shall  come  into  his 
possession  in  pursuance  of  the  provisions  of  this  Act, 
and,  acting  under  the  supervision  and  direction  of  the 
President,  and  under  such  rules  and  regulations  as  the 
President  shall  prescribe,  may  manage  such  property  and 
do  any  act  or  things  in  respect  thereof  or  make  any  dis- 
position thereof  or  of  any  part  thereof,  by  sale  or  other- 
wise, and  exercise  any  rights  which  may  be  or  become 
appurtenant  thereto  or  to  the  ownership  thereof,   if  and 

30 


when  necessary  to  prevent  waste  and  protect  such  property 
and  to  the  end  that  the  interests  of  the  United  States  in 
such  property  and  rights  or  of  such  person  as  may  ulti- 
mately become  entitled  thereto,  or  to  the  proceeds  thereof, 
may  be  preserved  and  safeguarded.  It  shall  be  the  duty  of 
every  corporation  incorporated  within  the  United  States 
and  every  unincorporated  association,  or  company,  or 
trustee,  or  trustees  within  the  United  States  issuing 
shares  or  certificates  representing  beneficial  interests  to 
transfer  such  shares  or  certificates  upon  its,  his,  or  their 
books  into  the  name  of  the  alien  property  custodian  upon 
demand,  accompanied  by  the  presentation  of  the  certifi- 
cates which  represent  such  shares  or  beneficial  interests. 
The  alien  property  custodian  shall  forthwith  deposit  in 
the  Treasury  of  the  United  States,  as  hereinbefore  pro- 
vided, the  proceeds  of  any  such  property  or  rights  so  sold 
by  him. 

Any  money  or  property  required  or  authorized  by  the 
provisions  of  this  Act  to  be  paid,  conveyed,  transferred, 
assigned,  or  delivered  to  the  alien  property  custodian 
shall,  if  said  custodian  shall  so  direct  by  written  order,  be 
paid,  conveyed,  transferred,  assigned,  or  delivered  to  the 
Treasurer  of  the  United  States  with  the  same  effect  as  if 
to  the  alien  property  custodian. 

After  the  end  of  the  war  any  claim  of  any  enemy  or 
of  an  ally  of  enemy  to  any  money  or  other  property  re- 
ceived and  held  by  the  alien  property  custodian  or  de- 
posited in  the  United  States  Treasury,  shall  be  settled  as 
Congress  shall  direct:  Provided,  however,  That  on  order 
of  the  President  as  set  forth  in  section  nine  hereof,  or  of 
the  court,  as  set  forth  in  sections  nine  and  ten  hereof,  the 
alien  property  custodian  or  the  Treasurer  of  the  United 
States,  as  the  case  may  be,  shall  forthwith  convey,  trans- 
fer, assign,  and  pay  to  the  person  to  whom  the  President 
shall  so  order,  or  in  whose  behalf  the  court  shall  enter  final 
judgment  or  decree,  any  property  of  an  enemy  or  ally  of 
enemy  held  by  said  custodian  or  by  said  Treasurer,  so  far 
as  may  be  necessary  to  comply  with  said  order  of  the 
President  or  said  final  judgment  or  decree  of  the  court: 
And  provided  further,  That  the  Treasurer  of  the  United 

31 


States,  on  order  of  the  alien  property  custodian  shall,  as 
provided  in  section  ten  hereof,  repay  to  the  licensee  any 
funds  deposited  by  said  licensee. 

SEC.  13.  That,  during  the  present  war,  in  addition  to 
the  facts  required  by  sections  forty-one  hundred  and 
ninety-seven,  forty-one  hundred  and  ninety-eight,  and 
forty-two  hundred  of  the  Revised  Statutes,  as  amended 
by  the  Act  of  June  fifteenth,  nineteen  hundred  and  seven- 
teen,* to  be  set  out  in  the  master's  and  shipper's  manifests 
before  clearance  will  be  issued  to  vessels  bound  to  foreign 
ports,  the  master  or  person  in  charge  of  any  vessel,  before 
departure  of  such  vessel  from  port,  shall  deliver  to  the 
collector  of  customs  of  the  district  wherein  such  vessel  is 
located  a  statement  duly  verified  by  oath  that  the  cargo  is 
not  shipped  or  to  be  delivered  in  violation  of  this  act,  and 
the  owners,  shippers,  or  consignors  of  the  cargo  of  such 
vessels  shall  in  like  manner  deliver  to  the  collector  like 
statement  under  oath  as  to  the  cargo  or  the  parts  thereof 
laden  or  shipped  by  them,  respectively,  which  statement 
shall  contain  also  the  names  and  addresses  of  the  actual 
consignees  of  the  cargo,  or  if  the  shipment  is  made  to  a 
bank  or  other  broker,  factor,  or  agent,  the  names  and 
addresses  of  the  persons  who  are  the  actual  consignees  on 
whose  account  the  shipment  is  made.  The  master  or 
person  in  control  of  the  vessel  shall,  on  reaching  port  of 
destination  of  any  of  the  cargo,  deliver  a  copy  of  the 
manifest  and  of  the  said  master's,  owner's,  shipper's,  or 
consignor's  statement  to  the  American  consular  officer  of 
the  district  in  which  the  cargo  is  unladen. 

SEC.  14.  That,  during  the  present  war,  whenever 
there  is  reasonable  cause  to  believe  that  the  manifest  or 
the  additional  statements  under  oath  required  by  the 
preceding  section  are  false  or  that  any  vessel,  domestic  or 
foreign,  is  about  to  carry  out  of  the  United  States  any 
property  to  or  for  the  account  or  benefit  of  an  enemy,  or 
ally  of  enemy,  or  any  property  or  person  whose  export, 
taking  out,  or  transport  will  be  in  violation  of  this  Act, 
the  collector  of  customs  for  the  district  in  which  such 

*The  Espionage  Act. 

32 


vessel  is  located  is  hereby  authorized  and  empowered, 
subject  to  review  by  the  President,  to  refuse  clearance  to 
any  such  vessel,  domestic  or  foreign,  for  which  clearance 
is  required  by  law,  and  by  formal  notice  served  upon  the 
owners,  master,  or  person  or  persons  in  command  or  charge 
of  any  domestic  vessel  for  which  clearance  is  not  required 
by  law,  to  forbid  the  departure  of  such  vessel  from  the 
port,  and  it  shall  thereupon  be  unlawful  for  such  vessel  to 
depart.  The  collector  of  customs  shall,  during  the  present 
war,  in  each  case  report  to  the  President  the  amount  of 
gold  or  silver  coin  or  bullion  or  other  moneys  of  the  United 
States  contained  in  any  cargo  intended  for  export.  Such 
report  shall  include  the  names  and  addresses  of  the  con- 
signors and  consignees,  together  with  any  facts  known  to 
the  collector  with  reference  to  such  shipment  and  partic- 
ularly those  which  may  indicate  that  such  gold  or  silver 
coin  or  bullion  or  moneys  of  the  United  States  may  be 
intended  for  delivery  or  may  be  delivered,  directly  or 
indirectly,  to  an  enemy  or  an  ally  of  enemy. 

SEC.  15.  That  the  sum  of  $450,000  is  hereby  appro- 
priated, out  of  any  money  in  the  Treasury  of  the  United 
States  not  otherwise  appropriated,  to  be  used  in  the  dis- 
cretion of  the  President  for  the  purpose  of  carrying  out  the 
provisions  of  this  Act  during  the  fiscal  year  ending  June 
thirtieth,  nineteen  hundred  and  eighteen,  and  for  the 
payment  of  salaries  of  all  persons  employed  under  this 
Act,  together  with  the  necessary  expenses  for  transporta- 
tion, subsistence,  rental  of  quarters  in  the  District  of 
Columbia,  books  of  reference,  periodicals,  stationery, 
typewriters  and  exchanges  thereof,  miscellaneous  supplies, 
printing  to  be  done  at  the  Government  Printing  Office, 
and  all  other  necessary  expenses  not  included  in  the 
foregoing. 

SEC.  16.  That  whoever  shall  willfully  violate  any  of 
the  provisions  of  this  Act  or  of  any  license,  rule,  or  regu- 
lation issued  thereunder,  and  whoever  shall  willfully 
violate,  neglect,  or  refuse  to  comply  with  any  order  of  the 
President  issued  in  compliance  with  the  provisions  of  this 
Act   shall,    upon   conviction,    be    fined    not   more   than 

33 


$10,000,  or,  if  a  natural  person,  imprisoned  for  not  more 
than  ten  years,  or  both ;  and  the  officer,  director,  or  agent 
of  any  corporation  who  knowingly  participates  in  such 
violation  shall  be  punished  by  a  like  fine,  imprisonment, 
or  both,  and  any  property,  funds,  securities,  papers,  or 
other  articles  or  documents,  or  any  vessel,  together  with 
her  tackle,  apparel,  furniture,  and  equipment,  concerned 
in  such  violation  shall  be  forfeited  to  the  United  States. 

SEC.  17.  That  the  district  courts  of  the  United 
States  are  hereby  given  jurisdiction  to  make  and  enter  all 
such  rules  as  to  notice  and  otherwise,  and  all  such  orders 
and  decrees,  and  to  issue  such  process  as  may  be  necessary 
and  proper  in  the  premises  to  enforce  the  provisions  of 
this  Act,  with  a  right  of  appeal  from  the  final  order  or 
decree  of  such  court  as  provided  in  sections  one  hundred 
and  twenty-eight  and  two  hundred  and  thirty-eight  of  the 
Act  of  March  third,  nineteen  hundred  and  eleven,  entitled 
"An  Act  to  codify,  revise,  and  amend  the  laws  relating  to 
the  judiciary." 

SEC.  18.  That  the  several  courts  of  first  instance  in 
the  Philippine  Islands  and  the  district  court  of  the  Canal 
Zone  shall  have  jurisdiction  of  offenses  under  this  Act 
committed  within  their  respective  districts,  and  concur- 
rent jurisdiction  with  the  district  courts  of  the  United 
States  of  offenses  under  this  Act  committed  upon  the  high 
seas  and  of  conspiracies  to  commit  such  offenses  as  de- 
fined by  section  thirty-seven  of  the  Act  entitled  "An  Act 
to  codify,  revise,  and  amend  the  penal  laws  of  the  United 
States,"  approved  March  fourth,  nineteen  hundred  and 
nine,  and  the  provisions  of  said  section  for  the  purpose  of 
this  Act  are  hereby  extended  to  the  Philippine  Islands 
and  to  the  Canal  Zone. 

SEC.  19.  That  ten  days  after  the  approval  of  this 
act  and  until  the  end  of  the  war,  it  shall  be  unlawful  for 
any  person,  firm,  corporation,  or  association,  to  print,  pub- 
lish, or  circulate,  or  cause  to  be  printed,  published,  or 
circulated  in  any  foreign  language,  any  news  item,  editor- 
ial, or  other  printed  matter,  respecting  the  Government 
of  the  United  States,  or  of  any  nation  engaged  in  the 

34 


present  war,  its  policies,  international  relations,  the  state 
or  conduct  of  the  war,  or  any  matter  relating  thereto: 
Provided,  That  this  section  shall  not  apply  to  any  print, 
newspaper,  or  publication  where  the  publisher  or  distrib- 
utor thereof,  on  or  before  offering  the  same  for  mailing, 
or  in  any  manner  distributing  it  to  the  public,  has  filed 
with  the  postmaster  at  the  place  of  publication,  in  the 
form  of  an  affidavit,  a  true  and  complete  translation  of 
the  entire  article  containing  such  matter  proposed  to  be 
published  in  such  print,  newspaper,  or  publication,  and 
has  caused  to  be  printed,  in  plain  type  in  the  English 
language,  at  the  head  of  each  such  item,  editorial,  or  other 
matter,  on  each  copy  of  such  print,  newspaper,  or  publica- 
tion, the  words  "True  translation  filed  with  the  post- 
master at on (naming  the  postoffice  where 

the  translation  was  filed,  and  the  date  of  filing  thereof), 

as  required  by  the  Act  of (here  giving  the  date  of 

this  Act)." 

Any  print,  newspaper,  or  publication  in  any  foreign 
language  which  does  not  conform  to  the  provisions  of  this 
section  is  hereby  declared  to  be  nonmailable,  and  it  shall 
be  unlawful  for  any  person,  firm,  corporation,  or  associa- 
tion, to  transport,  carry,  or  otherwise  publish  or  distribute 
the  same,  or  to  transport,  carry,  or  otherwise  publish  or 
distribute  any  matter  which  is  made  nonmailable  by  the 
provisions  of  the  Act  relating  to  espionage,  approved 
June  15,  1917:  Provided  further,  That  upon  evidence 
satisfactory  to  him  that  any  print,  newspaper,  or  publica- 
tion, printed  in  a  foreign  language  may  be  printed,  pub- 
lished, and  distributed  free  from  the  foregoing  restrictions 
and  conditions  without  detriment  to  the  United  States  in 
the  conduct  of  the  present  war,  the  President  may  cause 
to  be  issued  to  the  printers  or  publishers  of  such  print, 
newspaper,  or  publication,  a  permit  to  print,  publish,  and 
circulate  the  issue  or  issues  of  their  print,  newspaper,  or 
publication,  free  from  such  restrictions  and  requirements, 
such  permits  to  be  subject  to  revocation  at  his  discretion. 
And  the  Postmaster  General  shall  cause  copies  of  all  such 
permits  and  revocations  of  permits  to  be  furnished  to  the 
postmaster  of  the  post  office  serving  the  place  from  which 

35 


the  print,  newspaper,  or  publication,  granted  the  permit  is 
to  emanate.  All  matter  printed,  published  and  distrib- 
uted under  permits  shall  bear  at  the  head  thereof  in  plain 
type  in  the  English  language,  the  words,  "Published  and 

distributed  under  permit  authorized  by  the  Act  of 

(here  giving  date  of  this  Act),  on  file  at  the  post  office  of 

,  (giving  name  of  office).' ' 

Any  person  who  shall  make  an  affidavit  containing 
any  false  statement  in  connection  with  the  translation 
provided  for  in  this  section  shall  be  guilty  of  the  crime  of 
perjury  and  subject  to  the  punishment  provided  therefor 
by  Section  125  of  the  Act  of  March  4,  1909,  entitled 
"An  Act  to  codify,  revise,  and  amend  the  penal  laws  of 
the  United  States,' '  and  any  person,  firm,  corporation,  or 
association,  violating  any  other  requirement  of  this  section 
shall,  on  conviction  thereof,  be  punished  by  a  fine  of  not 
more  than  five  hundred  dollars  ($500),  or  by  imprison- 
ment of  not  more  than  one  year,  or,  in  the  discretion  of 
the  Court,  may  be  both  fined  and  imprisoned. 

Approved:     October  6,  1917. 


36 


PART  III. 

Report  on  the  Trading  with  the  Enemy 

Act 

Submitted  to  the  Senate  August  15,  1917,  by  the  Senate  Committee 
on  Commerce. 

(It  is  believed  that  the  Senate  Report,  together  with  a  memorandum 
of  American  and  English  cases  on  the  law  of  Trading  with  the 
Enemy,  will  help  to  a  fuller  understanding  of  the  Act,  and  of  its 
passage  through  Congress). 

The  Committee  on  Commerce,  to  whom  was  referred 
the  bill  (H.  R.  4960)  to  define,  regulate,  and  punish  trad- 
ing with  the  enemy,  and  for  other  purposes,  having  had 
the  same  under  consideration,  report  it  back  with  sundry 
amendments  and  recommend  that  the  bill  as  amended 
do  pass.  ^ 

Your  committee  devoted  more  than  a  month  to 
careful,  painstaking  consideration  of  this  bill.  It  spent 
several  days  in  giving  hearings  to  various  interested 
parties,  and  to  representatives  of  several  departments  of 
the  Government.  These  hearings  cover  more  than  two 
hundred  printed  pages. 

A  lucid  report  was  submitted  by  the  House  Com- 
mittee on  Interstate  and  Foreign  Commerce,  and  same 
is  annexed  hereto  and  made  a  part  hereof  as  Appendix 
"A." 

The  purpose  of  this  bill  is  to  mitigate  the  rules  of 
law  which  prohibit  all  intercourse  between  the  citizens 
of  warring  nations,  and  to  permit,  under  careful  safe- 
guards and  restrictions,  certain  kinds  of  business  to  be 
carried  on.  It  also  provides  for  the  care  and  adminis- 
tration of  the  property  and  property  rights  of  enemies 
and  their  allies  in  this  country  pending  the  war.  The 
spirit  of  the  act  is  to  permit  such  business  intercourse  as 
may  be  beneficial  to  citizens  of  this  country,  under  rules 
and  regulations  of  the  Secretary  of  Commerce,  which  will 

37 


prevent  our  enemies  and  their  allies  from  receiving  any 
benefits  therefrom  until  after  the  war  closes,  leaving  to 
the  courts  and  to  future  action  of  Congress  the  adjust- 
ment of  rights  and  claims  arising  from  such  transactions. 
Under  the  old  rule  warring  nations  did  not  respect  the 
property  rights  of  their  enemies,  but  a  more  enlightened 
opinion  prevails  at  the  present  time,  and  it  is  now  thought 
to  be  entirely  proper  to  use  the  property  of  enemies 
without  confiscating  it;  also  to  allow  such  business  as 
fire  insurance,  issuance  and  use  of  patents,  etc.,  to  be  carried 
on  with  our  enemies  and  their  allies,  provided  that  none 
of  the  profits  arising  therefrom  shall  be  sent  out  of  this 
country  until  the  war  ends.  The  general  principles 
governing  the  bill  are  so  well  stated  by  Assistant  Attorney 
General  Warren,  of  the  Department  of  Justice  (see  hear- 
ing pp.  130  and  131),  that  we  quote  from  him  as  follows: 

Trade  with  the  enemy  is  unlawful  under  the  common  law  both 
in  England  and  the  United  States.  (See  memorandum  of  American 
cases  prepared  by  me  and  submitted  as  an  appendix  to  my  remarks.) 
In  England  it  has  always  been  a  common  law  criminal  offense 
(Regina  v.  Castro  (1880),  5  Q.  B.  D.,  490).  In  the  United  States, 
so  far  as  such  trade  is  criminal,  it  must  be  made  so  by  Federal  legis- 
lation, there  being  no  common  law  of  crimes.  Such  trade  has  a 
civil  aspect — being  unlawful,  the  acts  of  all  parties  engaging  in  such 
trade  are  void,  or  their  rights  and  remedies  are  suspended  during  the 
war.  It  has  also  a  Federal  fiscal  aspect,  in  that  the  United  States 
may  cause  to  be  forfeited  in  the  courts  all  property  concerned  in  the 
unlawful  trade.     (See  memorandum  of  law  hereto  attached.) 

The  questions  of  what  constitutes  trade  with  the  enemy  and 
what  constitutes  an  enemy  within  the  purview  of  the  illegal  trade 
are  settled  by  the  decisions  of  the  English  and  of  the  American 
courts.  These  decisions  constitute  part  of  the  common  law  of  the 
two  countries.  Strictly  speaking,  they  are  not  founded  on  interna- 
tional law.  They  are  purely  domestic  decisions,  founded  on  such 
view  of  public  policy  as  the  courts  of  each  country  decide  to  adopt, 
paying  attention,  however,  to  the  general  consensus  of  other  coun- 
tries as  to  what  shall  constitute  a  wise  public  policy  in  dealings 
affecting  outside  countries. 

It  follows  that  when  the  legislature  of  a  country  enacts  a 
statute  relative  to  trade  with  the  enemy  containing  provisions  differ- 
ing from  the  law  laid  down  by  the  courts,  it  is  not  violating  or 
departing  from  international  law.  It  is  simply  expressing  its  views 
as  to  the  need  of  change  in  the  domestic  law  of  the  country.  Each 
country  must  decide  for  itself  what  it  shall  regard  as  unlawful  trade 

38 


with  the  enemy,  and  also  what  persons  it  shall  regard,  for  the  pur- 
poses of  such  trade,  as  enemy. 

Changes  in  economic,  commercial,  financial,  military,  naval, 
and  political  conditions  may  make  it  highly  necessary  that  doctrines 
as  to  trade  with  the  enemy  laid  down  by  our  courts  a  century  ago 
should  be  modified  by  the  legislature  either  by  making  them  more 
stringent  or  less  stringent,  according  to  the  needs  and  conditions 
of  the  present  day.  The  complexity  of  modern  business  demands 
far  greater  stringency  in  certain  directions  than  the  old  cases  de- 
cided by  the  courts  provided  for.  On  the  other  hand,  the  more 
enlightened  views  of  the  present  day  as  to  treatment  of  enemies 
make  possible  certain  relaxations  in  the  old  law. 

In  former  days,  trade  consisted  wholly  in  the  actual  transfer 
and  transport  of  commodities.  To-day  a  form  of  trade  even  more 
helpful  to  the  enemy  consists  of  transfer  of  credits  and  money  by 
letter,  cable,  or  wireless.  Hence,  while  formerly  the  mere  accumu- 
lation of  enemy  property  or  funds  in  this  country  did  not  assist  the 
enemy  materially,  so  long  as  it  remained  here,  now  with  the  ready 
ease  by  which  credits  may  be  transferred  and  funds  used  it  becomes 
just  as  important  to  prevent  an  enemy  from  building  up,  using,  or 
transferring  his  credit  or  credits  as  from  actually  transferring 
physical  property.  Hence  much  more  rigid  supervision  or  preven- 
tion of  such  transactions  becomes  necessary. 

So  also,  with  the  greater  ease  of  intercommunication  between 
countries,  it  may  become  necessary  to  expand  the  class  of  persons 
who,  within  the  purview  of  unlawful  trade  with  the  enemy,  shall  be 
deemed  "enemy."  Even  under  the  old  court  decisions  the  term 
"enemy"  (when  used  in  connection  with  trade  with  the  enemy)  was 
not  confined  to  citizens  of  the  enemy  nation;  it  applied  under  cer- 
tain circumstances  to  neutrals  and  their  business  within  the  enemy 
country,  and  even  to  our  own  citizens  when  having  business  or 
property  in  the  enemy  country.  For  these  reasons  a  modern 
trading-with-the-enemy  act  must  define  the  term  "enemy"  accord- 
ing to  the  particular  conditions  confronting  each  country  so  legis- 
lating, and  likewise  must  on  the  same  lines  define  the  particular  acts 
which  it  thinks  necessary  to  forbid  as  unlawful  trade.  It  was  my 
intent  in  drafting  this  bill  to  make  it  as  little  restrictive  of  American 
commerce  and  as  liberal  toward  the  enemy  private  person  as  was 
compatible  with  the  safety  of  the  United  States  and  with  justice  to 
American  interests. 

For  the  general  scope  of  the  present  bill  (H.  R.  4960),  I  refer  to 
a  memorandum  in  the  printed  hearings  before  the  House  committee, 
pages  24-25,  and  also  to  the  testimony  of  Secretary  Lansing,  Secre- 
tary Redfield,  and  myself,  ibid.,  pages  3-16,  31-44.  For  previous 
American  trade  with  the  enemy  statutes  and  proclamations,  see 
printed  hearings,  pages  26,  and  United  States  v.  Lane  (1868), 
8  Wall.,  185. 

39 


The  present  bill  is  less  stringent,  and  designedly  so,  than  the 
present  English  act.  And  it  is  less  stringent  than  the  law  of  trade 
with  the  enemy  as  laid  down  by  our  courts,  for  it  provides  for  a 
system  of  licenses  by  which  any  act  or  business  forbidden  by  the 
bill  may  be  licensed  to  be  done,  if  the  Secretary  of  Commerce  shall 
be  of  opinion  that  it  can  be  carried  on  or  done  with  safety  to  the 
United  States.  The  provisions  of  this  bill  greatly  amplify  and 
make  more  practical  a  system  of  license  or  permit  which  was  pro- 
vided for  by  the  Government  during  the  Civil  War.  The  bill  may 
in  some  ways  interfere  with  the  freedom  of  American  commerce, 
and  it  may  bear  hardly,  in  places,  upon  individuals.  By  this 
license  system,  however,  we  provide  a  method  of  relief  in  individual 
cases  where  the  relief  can  be  extended  without  injury  to  the  interests 
of  the  country.  But  it  is  necessary  always  to  bear  in  mind  that  a 
war  can  not  be  carried  on  without  hurting  somebody,  even,  at 
times,  our  own  citizens.  The  public  good,  however,  must  prevail 
over  private  gain.  As  was  said  in  Bishop  v.  Jones  (28  Texas,  294), 
there  can  not  be  "a  war  for  arms  and  a  peace  for  commerce." 

One  of  the  most  important  features  of  the  bill  is  that  which 
provides  for  the  temporary  taking  over  of  enemy  property,  its 
conservation  in  the  hands  of  the  alien  property  custodian,  and  its 
investment  in  United  States  bonds.  The  investment  feature,  so 
far  as  I  know,  is  an  entirely  new  provision,  contained  in  no  previous 
statute,  and  in  line  with  modern,  lenient  policies  with  reference  to 
private  property  in  time  of  war.  I  call  attention  to  Secretary 
Redfield's  characterization  of  this  part  of  the  bill,  in  the  House 
committee  hearings.  He  said:  "I  do  not  know  who  was  the  origin- 
ator of  the  idea,  but  whoever  was  has  created  something  as  fine  in  its 
way  as  the  return  of  the  Boxer  indemnity,  because  the  enemy  prop- 
erty is  all  in  our  hands  to  bear  its  share  of  our  expenses  in  fighting 
the  enemy,  and  yet  it  is  safeguarded  so  that  if  it  be  the  will  of 
Congress,  under  urgent  conditions,  it  may  be  returned  to  him  in- 
tact and  safeguarded  by  us  during  the  whole  period  of  the  war." 

The  theory  of  the  bill  is  that  enemy  property  in  this  country 
shall  not  remain  in  the  hands  of  the  enemy's  debtor  or  agent  here; 
but  that,  if  the  President  so  directs,  it  shall  be  temporarily  con- 
scripted by  the  Government  to  finance  the  Government  through 
investment  in  its  bonds,  and  to  be  paid  back  to  the  enemy  or 
otherwise  disposed  of  at  the  end  of  the  war  as  Congress  shall  direct. 
In  other  words,  we  fight  the  enemy  with  his  own  property  during 
the  war;  but  we  do  not  permanently  confiscate  it.  Moreover,  this 
temporary  conscription  of  enemy  property  is  also  conservation  of 
enemy  property ;  for  it  is  taken  from  the  hands  of  debtors  or  agents, 
as  to  whose  solvency  the  enemy  would  otherwise  have  to  assume  the 
risks,  and  invested  in  the  safest  security  in  the  world — United 
States  bonds — or  deposited  in  Government  depositaries. 

40 


For  convenience  reference  is  herein  made  to  the 
pages  of  the  printed  hearings,  at  which  detailed  expla- 
nation may  be  had  of  the  various  sections  of  the  bill. 

The  American  judicial  authorities  on  trading  with 
the  enemy  are  collected  in  a  memorandum  in  the  Senate 
subcommittee  hearings,  pages  170-175,  and  are  published 
herein  with  additions  as  Appendix  B.  The  English 
judicial  authorities,  collected  by  Assistant  Attorney 
General  Warren,  are  published  herein  as  Appendix  C. 

The  bill  is  susceptible  of  division  into  four  portions. 

The  first  portion  defines  the  word  "enemy"  and  pre- 
scribes the  acts  which  shall  be  forbidden  and  which  are 
made  criminal  if  performed  without  license. 

The  second  portion  provides  for  a  system  by  which 
any  act  otherwise  unlawful  and  criminal  may  be  licensed 
by  the  Secretary  of  Commerce  if  compatible  with  the 
safety  of  the  United  States  and  the  successful  prosecu- 
tion of  the  war. 

The  third  portion  deals  with  the  conservation  and 
utilization  of  enemy  property  during  the  war. 

The  fourth  portion  deals  with  the  entirely  separable 
question  of  patents. 

Taking  up  the  sections  in  detail: 

Section  2  prescribes  the  classes  of  persons  who  shall 
be  deemed  within  the  purview  of  the  term  '  'enemy"  for 
the  purposes  of  trade  during  time  of  war  and  for  the  pur- 
poses of  this  act.     (Hearings,  pp.  133-136.) 

Briefly  speaking,  as  applied  to  the  present  situation, 
any  person  residing  or  doing  business  within  Germany, 
and  any  person  residing  outside  the  United  States 
and  doing  business  within  Germany,  and  any  corpora- 
tion incorporated  within  Germany  or  incorporated  within 
any  country  (other  than  the  United  States)  and  doing 
business  within  Germany  are  termed  ' 'enemy."  "Doing 
business  within  Germany,"  of  course,  means  having 
a  branch  or  agency  actively  conducting  business  within 
that  country.  The  bill  does  not  bring  within  the 
term  "enemy"  a  neutral,  unless  such  neutral  has  a 
branch  of  its  business  within  Germany.  Nor  does 
the  bill  term  "enemy"  a  German  residing  in  a  neutral 

41 


country  and  conducting  no  part  of  his  business  within 
Germany.  In  this  respect  the  bill  differs  from  the  more 
extreme  provisions  of  the  English  law,  under  which  the 
English  "blacklist"  was  set  up  A  German  residing  in 
the  United  States  is  not  included  in  any  way  within  the 
term  "enemy"  by  the  direct  operation  of  the  act  itself. 
The  act  provides,  however,  that  a  German  residing  or 
doing  business  anywhere  may,  if  the  President  shall  find 
the  safety  of  the  United  States  or  the  successful  prosecu- 
tion of  the  war  so  requires,  be,  by  proclamation  of  the 
President,  included  with  the  term  "enemy."  A  corpora- 
tion chartered  in  the  United  States  does  not  come  within 
the  purview  of  the  term  "enemy,"  even  if  controlled  by 
German  stockholders;  but  such  corporation  may  not 
transmit  dividends  or  profits  out  of  the  United  States  to 
its  German  stockholders  and  is  criminally  liable,  just  as 
any  other  citizen  of  the  United  States  may  be,  for  engag- 
ing in  an  act  of  trade  with  the  enemy  made  illegal  by 
the  act.     (Hearings,  p.  189.) 

The  term  "ally  of  enemy"  is  defined  along  similar 
lines  as  the  definition  of  the  term  "enemy." 

Section  3  taken  in  connection  with  the  definition  of 
the  words  "to  trade"  in  section  2,  sets  forth  the  forms 
of  intercourse  with  the  enemy  or  with  the  ally  of  enemy 
which  are  made  specifically  criminal.  It  is  to  be  noted 
that  this  section  does  not  purport  and  is  not  intended  to 
be  declaratory  of  every  form  of  intercourse  with  the 
enemy  which  is  unlawful  at  common  law.  The  act 
specifically  provides  in  section  7  (b)  that  it  shall  not  be 
construed  to  recognize  as  valid  any  act  which  would 
otherwise  have  been  void  at  law,  unless  such  act  is  ex- 
pressly authorized  by  the  statute.  In  other  words,  the 
mere  fact  that  section  3  fails  to  make  any  given  form  of 
intercourse  with  the  enemy  criminal  does  not  make  such 
intercourse  lawful  if  it  is  unlawful  under  the  general  doc- 
trines of  law,  as  between  private  individuals  and  as 
affecting  their  civil  rights  and  liabilities.  (Hearings,  pp. 
151-158,   184.) 

Any  form  of  trade  with  the  enemy  which  is  made 
criminal  by  section  3  may  be  performed  under  license 

42 


from  the  Secretary  of  Commerce  granted  either  to  the 
person  engaged  in  the  trade  or  to  the  enemy  person  him- 
self. Full  provision  for  licenses  to  be  issued  by  the  Sec- 
retary of  Commerce  is  found  in  section  5.  Such  au- 
thorization of  trade  under  license  constitutes  relaxation 
of  the  rule  of  international  law  forbidding  trade  with  the 
enemy.  The  right  to  license  such  trade,  however,  has 
always  been  recognized,  and  statutory  and  executive 
provisions  were  made  for  such  licenses  during  the  Civil 
War  in  the  United  States.  The  present  bill  contains 
much  more  elaborate  provisions  for  such  licenses. 

Section  3  further  contains  provisions  making  it  un- 
lawful to  transport  Germans  or  their  allies  into  or  out 
of  the  United  States  without  license  from  the  Secretary 
of  Commerce.  The  necessity  for  this  provision  is  very 
evident. 

Section  3  also  makes  criminal  the  transmission  or 
attempted  transmission  out  of  or  into  the  United  States 
of  letters  or  other  tangible  forms  of  communication  except 
in  the  regular  course  of  the  mail,  and  also  the  transmission 
of  letters  and  all  other  forms  of  communication  intended 
for  or  to  be  delivered  directly  or  indirectly  to  the  enemy. 
A  provision,  however,  is  made  whereby  persons  who 
desire  to  take  matter  out  of  the  United  States  other  than 
in  the  regular  course  of  the  mail  or  who  desire  to  send 
letters  to  the  enemy  may  accomplish  their  purpose,  if 
the  same  shall  be  proper,  by  submitting  the  letters,  etc., 
to  the  Secretary  of  Commerce  or  to  such  officer  as  the 
President  may  direct  and  obtaining  his  consent.  At 
present  there  is  no  adequate  law  on  the  statute  books 
which  prevents  the  smuggling  into  or  out  of  this  country 
of  mail  matter  outside  of  the  regular  mail  service.  The 
lack  of  any  criminal  statute  on  this  subject  constitutes  a 
great  source  of  danger  to  this  country.  (Hearings,  pp. 
190-192.) 

Section  4  (a)  contains  elaborate  provisions  to  cover 
the  case  of  branches  or  agencies  of  German  corporations 
doing  business  in  this  country — insurance,  reinsurance, 
commercial,  and  otherwise  (and  also  of  German  ally 
corporations).     One  of  the  purposes  of  this  section  is  to 

43 


give  the  United  States  Government  full  control  over  all 
enemy  and  ally  of  enemy  insurance  or  reinsurance  com- 
panies, and  to  safeguard  the  interests  of  American  com- 
panies which,  in  the  past,  have  had  business  dealings 
with  them. 

These  transactions  have  been  in  the  nature  of  rein- 
surances. During  the  year  1916  the  reinsurance  pre- 
miums written  by  foreign  companies,  with  branch  offices 
in  this  country,  amounted  to  $50,000,000.  Of  this  total, 
47  per  cent  went  to  Russian  and  French  companies,  11 
per  cent  to  neutral  companies,  and  the  balance,  or  42  per 
cent,  to  enemy  countries  or  their  allies. 

Absolute  control  over  all  such  companies  of  enemy 
nations  (and  their  allies)  is  vested  in  the  Secretary  of 
Commerce,  who  is  authorized  to  grant  or  refuse  to  grant 
all  license  applications  emanating  from  said  companies, 
or  their  agents,  doing  business  in  the  United  States. 

Section  4,  in  conjunction  with  section  9  also  protects 
and  safeguards  those  insurance  companies  of  the  United 
States  which  have  existing  contracts,  entered  into  prior 
to  the  war,  with  enemy  reinsurance  companies.  The 
latter,  under  the  proposed  act,  may  be  compelled  to  turn 
over  to  the  alien-property  custodian,  an  official  created 
by  said  act,  all  their  assets  in  the  United  States. 

In  such  cases  the  American  companies  are  enabled 
to  replace  their  contracts  elsewhere,  those  existing  with 
enemy  countries  being  liquidated,  upon  proper  proof  of 
claim,  presented  to  the  alien-property  custodian,  to  the 
Treasurer  of  the  United  States,  to  the  Secretary  of  Com- 
merce, or,  upon  suit,  to  the  United  States  courts.  Ameri- 
can branches  of  German  corporations  are  given  30  days 
within  which  to  apply  for  a  license.  If  the  license  is 
refused,  any  further  doing  of  business  in  this  country  by 
the  German  corporation  will  be  illegal.  Pending  the  30 
days  within  which  application  may  be  made,  and  further 
pending  the  decision  of  the  Secretary  on  the  question  of 
license,  insurance  companies  are  allowed  to  continue  to 
do  business  under  the  present  provisions  of  the  President's 
proclamation — that  is,  they  may  continue  their  ordinary 
business,  but  they  may  not  transmit  any  funds  out  of 

44 


the  country  or  allow  any  funds  to  be  used  as  a  basis  for 
credits.  A  German  insurance  or  reinsurance  company 
may  not,  however,  do  any  marine  or  war-risk  insurance, 
and  provision  is  made  that  the  Secretary  of  Commerce 
shall  not  have  power  to  license  any  such  marine  or  war- 
risk  insurance  or  reinsurance.  (Hearings,  pp.  99-111, 
139-144,  147.) 

As  to  branches  of  business  corporations  pending  the 
30  days  and  further  pending  the  decision  of  the  Secretary 
as  to  license,  such  German  branches  may  continue  to  do 
business,  but  they  also  may  not  transmit  or  transfer  any 
money  or  property  out  of  the  United  States  or  use  it  for 
the  basis  of  the  establishment  of  credits.  Detailed  pro- 
visions are  made  to  safeguard  American  interests  in  case 
the  Secretary  of  Commerce  refuses  a  license  to  a  branch 
of  a  German  insurance  company  or  revokes  any  license 
after  he  shall  have  granted  it.     (Hearings,  pp.  145-146.) 

Section  4  (b)  provides  that  no  enemy  and  no  partner- 
ship of  which  he  was  a  member  shall  assume  or  use  any 
name  other  than  that  by  which  he  or  it  was  ordinarily 
known  at  the  beginning  of  the  war,  except  under  license 
from  the  Secretary  of  Commerce. 

Section  5  gives  the  President  the  power  to  suspend 
the  provisions  of  the  act  in  so  far  as  they  apply  to  an  ally 
of  enemy,  if  he  shall  find  it  compatible  with  the  interests 
of  this  country.  The  Secretary  of  Commerce  is  given 
power  to  issue  licenses,  and  by  section  5  (b)  is  further 
authorized  to  order  the  suspension  for  not  more  than  30 
days  of  any  transaction  which  he  has  reason  to  believe  is 
an  enemy  transaction,  pending  investigation  by  him. 
(Hearings,  pp.  159,  186.) 

In  order  to  prevent  any  conflict  between  the  powers 
of  the  Secretary  of  the  Treasury  and  those  of  the  Secre- 
tary of  Commerce  relative  to  banks,  it  is  provided  in 
section  5  (b)  that  any  investigation  of  a  bank  shall  be 
made  through  the  Secretary  of  the  Treasury,  or  the 
Federal  Reserve  Board,  or  with  the  concurrence  of  the 
Secretary  of  the  Treasury,  and  he  must  also  concur  in 
any  licenses  issued  relative  to  the  export  of  gold  or  silver 
coin  or  bullion.     (Hearings,  pp.  113-130,  194,  221.) 

45 


By  section  5  (c)  the  Secretary  of  the  Treasury  is 
given  broad  power  to  investigate  any  transactions  in  for- 
eign exchange,  gold  or  silver  exports, and  transfers  of 
foreign  credits  (hearings,  pp.  113,  130,  194,  221),  and 
whenever  it  shall  appear  to  the  Secretary  of  the  Treasury 
that  the  export  of  any  gold  or  silver  coin,  or  bullion,  or 
of  any  moneys  of  the  United  States  may  result  in  viola- 
tion of  the  provisions  of  this  act,  he  may  withhold  such 
export  for  a  period  of  not  exceeding  90  days  pending  in- 
vestigation by  him. 

Section  6  provides  for  the  general  administration  of 
the  bill  by  the  Secretary  of  Commerce  and  for  the  ap- 
pointment of  a  new  official  known  as  the  alien  property 
custodian,  who  shall  have  charge  of  all  money  or  property 
belonging  to  an  enemy  or  ally  of  enemy  which  may  be 
paid  or  conveyed  to  him  under  the  provisions  of  the  bill. 

The  bill  next  provides  for  the  power  of  the  Govern- 
ment to  deal  with  enemy  property  so  as  to  conserve  and 
utilize  such  property  found  within  its  jurisdiction  so  far 
as  practicable,  both  in  the  interests  of  this  Government 
and  of  the  enemy  owner.  The  general  provision  is  made 
that  the  Government  may  require  any  form  of  enemy 
property  found  within  the  United  States  to  be  paid 
or  conveyed  to  the  alien  property  custodian,  and  any 
person  holding  enemy  property  in  this  country  is  given 
the  option,  with  the  consent  of  the  Secretary  of  Com- 
merce, to  transfer  such  property  into  the  hands  of  the 
Government. 

The  most  novel  and  important  feature  of  this  portion 
of  the  bill  is  the  requirement  that  all  money  and  quick 
assets  paid  over  to  the  Government  shall  be  invested  in 
United  States  bonds.  So  far  as  known  this  is  an  entirely 
new  provision,  contained  in  no  previous  statute.  It  is  in 
line,  however,  with  the  modern  and  advanced  lenient 
policy  with  reference  to  private  property  in  time  of  war. 
By  this  means,  enemy  property  is  temporarily  con- 
scripted by  the  Government  to  finance  the  Government 
through  investment  in  these  bonds,  and  to  be  paid  back 
to  the  enemy  or  otherwise  disposed  of  at  the  end  of  the 
war,  as  Congress  shall  direct.     In  other  words,  we  fight 

46 


the  enemy  with  his  own  property  during  the  war  but 
we  do  not  permanently  confiscate  it.  This  temporary 
conscription  of  enemy  property  is  also  conservation  of 
enemy  property,  for  it  takes  the  property  from  the  hands 
of  debtors  or  agents,  as  to  whose  solvency  the  enemy 
would  otherwise  be  obliged  to  assume  the  risk,  and  it 
invests  the  property  in  the  safest  security  in  the  world 
— bonds  of  the  United  States — or  deposits  it  in  Govern- 
ment depositories. 

Section  7  contains  provisions  for  ascertainment  as 
to  enemy  property  in  this  country. 

Section  7  (a)  requires  reports  from  corporations  and 
associations  of  enemy  officers,  directors  and  stockholders. 
As,  however,  it  is  known  that  much  enemy  property  was 
transferred  after  the  severing  of  relations  with  Germany 
and  prior  to  the  beginning  of  the  war,  provision  is  made 
that  the  Secretary  of  Commerce  may  require  lists  of  all 
stock  which  was  owned  on  February  3,  1917,  by  any 
person  now  defined  as  an  enemy  or  ally  of  enemy.  This 
provision  is  highly  necessary  in  order  that  investigation 
may  be  made  as  to  the  bonafide  character  of  these  trans- 
fers. As  to  any  actual  and  legal  transfer,  of  course  the 
bill  would  have  no  retrospective  action.  This  provision 
is  merely  for  the  purpose  of  obtaining  information. 

Further  provision  is  made  that  any  person  in  this 
country  who  holds  property  belonging  to  or  for  an  enemy 
or  who  owes  any  debt  to  an  enemy  shall  report  the  same 
to  the  Secretary  of  Commerce,  and  there  is  a  similar  pro- 
vision for  a  report  of  money  or  property  held  or  debt 
owed  on  February  3,  1917.     (Hearings,  pp.  153-157.) 

Section  7  (b)  contains  a  provision  whereby  nothing 
in  this  act  shall  be  deemed  to  render  valid  any  act  or 
transaction  constituting  trade  with  or  for  an  enemy 
performed  or  engaged  in  since  the  beginning  of  the  war 
and  prior  to  the  passage  of  the  act  which  would  have 
otherwise  been  void  or  illegal  at  law.  (Hearings,  pp. 
157-158,   184.) 

In  order  to  prevent  evasion  of  the  act  by  assignments 
of  enemy  interests  to  neutrals,  to  be  collected  for  the 
benefit  of  the  enemy,  it  is  provided  that  no  person  shall 

47 


acquire  any  right  or  remedy  by  virtue  of  any  such  assign- 
ment or  conveyance  made  after  the  passage  of  the  act, 
or,  unless  such  assignment  or  conveyance  is  made  under 
license  as  provided  in  the  act.  Safeguard  is  given  to 
American  citizens  who  may  have  acquired  interests 
under  contracts  assigned  prior  to  the  passage  of  the  act, 
so  that  such  contracts  may  be  carried  out  and  completed 
if  there  is  no  actual  interest  of  the  enemy  remaining  in 
such  contract.     (Hearings,  p.  184.) 

Provision  is  also  made  for  payment  to  American 
citizens  out  of  German  funds  in  this  country  where  the 
funds  were  received  prior  to  the  war  and  the  necessity 
for  payment  arises  out  of  transactions  entered  into 
prior  to  the  war,  but  such  payments  are  to  be  made  only 
with  the  license  of  the  Secretary  of  Commerce.  (Hear- 
ings, pp.  47-72.) 

Section  7  (c)  provides  that  the  Secretary  of  Com- 
merce may,  by  direction  of  the  President,  require  any 
enemy  property  to  be  paid  to  the  alien  property  custo- 
dian. 

Section  7  (d)  authorizes  any  person  holding  property 
for  an  enemy  or  owing  money  or  property  to  an  enemy 
to  pay  or  convey  the  same,  at  his  option,  with  the  con- 
sent of  the  Secretary  of  Commerce,  to  the  alien  property 
custodian.     (Hearings,  pp.  158-159.) 

Section  7  (e)  contains  provisions  giving  protection 
to  any  person  who  may  have  performed  any  act  in  pur- 
suance of  an  order,  rule,  or  regulation  made  by  the  Sec- 
retary of  Commerce,  and  provides  also  for  acquittances 
and  discharges  to  any  such  person  paying  or  conveying 
property  to  the  alien  property  custodian. 

Section  8  (a)  contains  provision  by  which  American 
citizens  holding  security  on  enemy  property  may  dispose 
of  such  security  on  notice,  presentation,  or  demand 
served  by  him  on  the  alien  property  custodian,  with  the 
same  force  and  effect  as  if  duly  served  on  the  enemy 
personally. 

Similarly,  American  citizens  who  have  contracts 
with  the  enemy  terminable  on  notice  or  presentation  or 
demand  may  terminate  such  contracts  by  such  notice, 


48 


presentation,  or  demand  served  on  the  alien  property 
custodian.     (Hearings,  pp.  160-161,  185-186.) 

Section  8  (b)  protects  American  citizens  who  may 
have  entered  into  contracts  for  the  delivery  of  goods  after 
the  ending  of  the  European  War  and  who  now  find  them- 
selves subject  to  conditions  which  were  not  contemplated 
when  they  entered  into  the  contracts,  namely,  the  entry 
of  the  United  States  into  the  war.  It  is  provided  that 
such  contracts  may  be  abrogated  by  notice  served  on  the 
alien  property  custodian.  (Hearings,  pp.  161-165,  178— 
183.) 

Section  8  (c)  provides  that  the  statute  of  limitations 
shall  be  suspended  on  any  contract  entered  into  prior  to 
the  beginning  of  the  war  between  a  citizen  of  the 
United  States  and  a  neutral  whereby  the  United  States 
citizen  has  become  liable  for  the  payment  of  money  which 
is  evidenced  by  an  obligation  secured  by  funds  or  property 
situated  in  an  enemy  country. 

Section  9  protects  American  citizens  who  have  any 
claim  or  interest,  right  or  title  in  or  to  any  money  or 
property  which  has  been  paid  or  conveyed  to  the  alien 
property  custodian.  This  section  is  necessary  to  pre- 
serve and  protect  innocent  claimants,  notwithstanding 
the  enforced  absence  of  the  parties  in  interest.  If  the 
enemy  and  all  other  parties  claiming  intere-t  in  his 
property  assent,  the  Secretary  of  Commerce  may  order 
the  property  returned  or  paid  over  or  transferred  to  the 
claimant.     (Hearings,  pp.  148-151.) 

If  such  assent  is  not  obtained,  then  adequate  pro- 
vision is  made  for  a  suit  in  equity.  Such  a  suit  may  be 
instituted  at  any  time  before  the  expiration  of  six  months 
after  the  end  of  the  war. 

Section  10  relates  solely  to  patents  which  are  placed 
under  control  and  supervision  of  the  Federal  Trade  Com- 
mission. This  section  is  fully  explained  in  subdivision 
111  of  the  House  report,  to  which  reference  is  made. 
Two  material  amendments  were  added  by  the  Senate 
committee,  one  authorizing  the  Federal  Trade  Commis- 
sion to  fix  prices  when  licenses  are  granted  to  use  a  patent, 
trade-mark,   print,   label,   or  copyright,   and   the  other 

49 


authorizing  the  Commissioner  of  Patents  to  enforce 
secrecy  in  regard  to  any  invention  which  may,  in  his 
opinion,  be  detrimental  to  the  public  safety  or  defense. 

Section  1 1  contains  provisions  for  the  preservation  of 
enemy  property  by  governmental  agency  and  in  the 
interest  of  the  enemy  himself.  The  chances  of  trade  in 
time  of  war  may  involve  the  solvency  of  debtors  or  holders 
of  enemy  property,  but  the  taking  over  and  custody  of 
the  property  by  the  Government  gives  to  the  enemy  the 
best  possible  protection.  Not  only  is  the  enemy  property 
preserved  and  protected,  but  provision  is  made  for  its 
utilization  in  the  interest  of  this  Government.  Moneys 
(including  checks  and  drafts  payable  on  demand)  held 
by  the  alien  property  custodian  are  required  to  be  de- 
posited immediately  by  him  with  the  Treasurer  of  the 
United  States,  and  may  be  thereupon  invested  or  rein- 
vested by  the  Secretary  of  the  Treasury  in  the  bonds  or 
certificates  of  the  United  States  under  appropriate  rules 
and  regulations.  Thereby  the  enemy  property  may  be 
utilized  to  support  and  promote  the  success  of  the  war. 
This  investment  and  reinvestment  is  not  only  sound 
business  policy  but  a  just  method  of  auxiliary  warfare. 

As  there  may  be  paid  or  conveyed  to  the  alien  prop- 
erty custodian,  in  addition  to  moneys,  checks,  and  drafts 
payable  on  demand,  much  other  property,  such  as  stocks, 
bonds,  tangible  personal  property  and  otherwise,  provi- 
sion is  made  vesting  the  alien  property  custodian  with  the 
power  of  a  common-law  trustee  in  respect  to  all  property, 
other  than  money,  so  that  he  may  be  enabled  to  manage 
such  property  and  exercise  any  rights  which  might  be 
appurtenant  thereto.  (Hearings,  pp.  70-72,  167.)  In 
case  of  sale,  however,  of  any  such  property,  the  proceeds 
are  required  to  be  paid  to  the  Treasurer  of  the  United 
States. 

In  order  to  simplify  governmental  bookkeeping,  pro- 
vision is  made  that  any  money  or  property  required  to 
be  paid  or  conveyed  to  the  alien  property  custodian  shall, 
on  his  written  order,  be  so  paid  or  conveyed  direct  to  the 
Treasurer  of  the  United  States. 

50 


While  the  theory  on  which  the  bill  is  drafted  is  that 
enemy  property  shall  be  protected  and  utilized,  but  not 
confiscated,  the  ultimate  disposition  of  the  enemy  prop- 
erty received  and  held  by  the  Government  is  left  entirely 
to  Congress,  and  provision  is  made  that  after  the  endfof 
the  war  enemy  claims  to  such  property  ''shall  be  settled 
as  Congress  shall  direct/' 

Sections  12  and  13  relate  to  the  regulation  of  clear- 
ance of  vessels  bound  for  foreign  ports,  in  order  that 
adequate  machinery  may  be  provided  for  the  prevention 
of  departure  of  such  vessels  in  case  of  cargoes  shippedjn 
violation  of  the  provisions  of  the  act. 

Section  14  contains  appropriations  of  $350,000  for 
the  Secretary  of  Commerce,  $50,000  for  the  Federal 
Trade  Commission,  and  $50,000  for  the  Secretary  of  the 
Treasury,  to  be  expended  for  the  purpose  of  carrying 
out  the  provisions  of  the  act. 

Section  15  provides  penalties  for  the  violation  of  the 
provisions  of  the  act  or  any  license,  rule,  or  regulation 
issued  thereunder  or  for  failure  to  comply  with  any  order 
issued  thereunder. 

Sections  16  and  17  vest  jurisdiction  in  appropriate 
courts  for  carrying  out  the  provisions  of  the  act. 


APPENDIX  A. 


(Appendix  A  consisted  of  the  House  report,  but  in  view  of  the  many 
changes  that  have  been  made  in  the  Bill  since  it  was  first  reported 
to  the  House,  it  is  not  deemed  advisable  to  reprint  the  House  report 
here,  the  Senate  report  fully  covering  the  situation). 


51 


APPENDIX  B. 

MEMORANDUM  OF  AMERICAN  CASES  AND  RE- 
CENT  ENGLISH   CASES   ON   THE   LAW   OF 
TRADING  WITH  THE  ENEMY. 

Ry  Charles  Warren,  Assistant  Attorney  General  of  the  United  State*. 

I. 

AMERICAN  CASES. 

(1)  Every  species  of  intercourse  with  the  enemy  is 
illegal.  The  prohibition  is  not  limited  to  mere  commercial 
intercourse. 

Johnson,  J.,  in  The  Rapid  (1814)  (8  Cranch,  155, 162, 
163): 

"Whether  this  was  a  trading  in  the  eye  of  the  prize 
law  such  as  will  subject  the  property  to  capture. 

"The  force  of  the  argument  on  this  point  depends 
upon  the  terms  made  use  of.  If  by  trading  in  prize  law 
was  meant  that  signification  of  the  term  which  consists 
in  negotiation  or  contract,  this  case  would  certainly  not 
come  under  the  penalties  of  the  rule.  But  the  object, 
policy,  and  spirit  of  the  rule  is  to  cut  off  all  communica- 
tion or  actual  locomotive  intercourse  between  individuals 
of  the  belligerent  States.  Negotiation  or  contract  has 
therefore  no  necessary  connection  with  the  offense. 
Intercourse  inconsistent  with  actual  hostility  is  the  of- 
fense against  which  the  operation  of  the  rule  is  directed, 
and  by  substituting  this  definition  for  that  of  trading 
with  an  enemy  an  answer  is  given  to  this  argument.' ' 

And  see  especially  Story,  J.,  in  The  Julia  (1814) 
(8  Cranch,  181,  193,  194,  195): 

"Nor  is  there  any  difference  between  direct  inter- 
course between  the  enemy  countries  and  an  intercourse 
through  the  medium  of  a  neutral  port.  The  latter  is  as 
strictly  prohibited  as  the  former." 

See  also  Story,  J.,  in  The  Julia  (1813)  (1  Gallison, 
594,602,603): 

52 


"*  *  *  It  would  seem  a  necessary  result  of  a  state 
of  war  to  suspend  all  negotiations  and  intercourse  be- 
tween the  subjects  of  the  belligerent  nations.  By  the 
war  every  subject  is  placed  in  hostility  to  the  adverse 
party.  He  is  bound  by  every  effort  of  his  own  to  assist 
his  own  government  and  to  counteract  the  measures  of 
its  enemy.  Every  aid,  therefore,  by  personal  communi- 
cation or  by  other  intercourse  which  shall  take  off  the 
pressure  of  the  war  or  foster  the  resources  or  increase  the 
comforts  of  the  public  enemy,  is  strictly  inhibited.  No 
contract  is  considered  as  valid  between  enemies,  at  least 
so  far  as  to  give  them  a  remedy  in  the  courts  of  either 
government,  and  they  have,  in  the  language  of  the  civil 
law,  no  ability  to  sustain  a  persona  standi  in  judicio. 
The  ground  upon  which  a  trading  with  the  enemy  is 
prohibited  is  not  the  criminal  intentions  of  the  parties 
engaged  in  it  or  in  the  direct  and  immediate  injury  to  the 
State.  The  principle  is  extracted  for  a  more  enlarged 
policy,  which  looks  to  the  general  interests  of  the  Nation, 
which  may  be  sacrificed  under  the  temptation  of  unlim- 
ited intercourse  or  sold  by  the  cupidity  of  corrupted 
avarice." 

See  also  The  St.  Lawrence  (1814)  (8  Cranch,  434); 
The  Alexander  (1814)  (8  Cranch,  169);  The  Rugen  (1816) 
(1  Wheaton,  62);  United  States  v.  Barber  (1815)  (9 
Cranch,  243);  United  States  v.  Sheldon  (1817)  (2  Whea- 
ton, 119). 

Story,  J.,  in  The  Liverpool  Packet  (1813)  (1  Gallison, 
512,  521,  522): 

"I  look  back  upon  that  decision  (The  Julia)  without 
regret,  and  after  much  subsequent  reflection  can  not 
doubt  that  it  has  a  perfect  foundation  in  the  principles 
of  public  law.  To  the  many  authorities  there  stated  I 
might  have  added  the  pointed  language  of  Sir  W.  Scott, 
in  the  Jonge  Pieter  (4  Rob.,  79),  that  'without  the  license 
of  the  government  no  communication,  direct  or  indirect, 
can  be  carried  on  with  the  enemy,'  and  the  rule  strongly 
illustrative  of  the  principle,  which  is  acknowledged  as 
early  as  the  yearbooks  and  has  received  sanction  down  to 
the  present  times,  that  every  contract  and  engagement 

53 


made  with  the  enemy  pending  war  is  utterly  void/' 

The  Lord  Wellington  (1814)  (2  Gallison,  102). 

The  case  of  United  States  v.  Barker  (1820,  Circ.  Ct. 
N.  Y.)  (1  Paine,  156),  constitutes  a  departure  from  the 
general  rule. 

The  rigid  rule  was  reaffirmed  in  Scholefield  v.  Eichel- 
berger  (1883)  (7  Pet.,  586,  593): 

"The  doctrine  is  not  at  this  day  to  be  questioned; 
that  during  a  state  of  hostility  the  citizens  of  the  hostile 
States  are  incapable  of  contracting  with  each  other.  For 
near  20  years  this  has  been  acknowledged  as  the  settled 
doctrine  of  this  court,  and  in  a  case  which  proves  it  to 
be  a  rule  of  very  general  and  rigid  application  {The 
Rapid).  *  *  *  The  question  has  never  yet  been  ex- 
amined whether  a  contract  for  necessaries,  or  even  for 
money  to  enable  the  individual  to  get  home,  would  not 
be  enforced,  and  analogies  familiar  to  the  law  as  well  as 
the  influence  of  the  general  rule  in  international  law,  that 
the  severities  of  war  are  to  be  diminished  by  all  safe  and 
practical  means,  might  be  appealed  to  in  support  of  such 
an  exception.  But  at  present  it  may  be  safely  affirmed 
that  there  is  no  recognized  exception  but  permission  of  a 
State  to  its  own  citizen,  which  is  also  implied  in  any 
treaty  stipulation  to  that  effect  entered  into  by  the  bellig- 
erents." 

The  Jecker  v.  Montgomery  (1855)  (18  How.,  110, 
112,  119): 

"The  consequence  of  this  state  of  hostility  is  that  all 
intercourse  and  communication  between  them  is  unlaw- 
ful.    *     *     * 

"We  have  seen,  by  the  authorities  cited,  that  inter- 
course  with  the  enemy  is  sufficient  cause  for  personal  pun- 
ishment and  for  the  confiscation  of  property;  that  it  is  a 
cause  originating  in  and  inflexibly  enforced  by  necessity  for 
guarding  the  public  safety.'' 

(2)     Property  engaged  in  illegal  intercourse  with  the 
enemy  is  deemed  enemy  property  and  is  liable  to  forfeiture. 
The  Sally  (1814)  (8  Cr.,  382,  384): 
"By2the|general|law  of^prize,  property  engaged  in 

54 


an  illegal  intercourse  with  the  enemy  is  deemed  enemy 
property.  It  is  of  no  consequence  whether  it  belongs  to 
an  ally  or  to  a  citizen;  the  illegal  traffic  stamps  it  with 
the  hostile  character,  and  attaches  to  it  all  the  penal 
consequences  of  enemy  ownership." 

The  Rapid  (1814)  (8  Cr.,  155,  162,  163): 

'The  law  of  prize  is  part  of  the  law  of  nations.  In 
it  a  hostile  character  is  attached  to  trade,  independently 
of  the  character  of  the  trader  who  pursues  or  directs  it. 
Condemnation  to  the  use  of  the  captor  is  equally  the  fate 
of  the  property  of  the  belligerent  and  of  the  property 
found  engaged  in  antineutral  trade.  But  a  citizen  or 
ally  may  be  engaged  in  a  hostile  trade,  and  thereby 
involve  his  property  in  the  fate  of  those  in  whose  cause 
he  embarks. 

"This  liability  of  the  property  of  a  citizen  to  con- 
demnation as  prize  of  war  may  be  likewise  accounted  for 
under  other  considerations.  Everything  that  issues  from 
a  hostile  country  is,  prima  facie,  the  property  of  the 
enemy,  and  it  is  incumbent  upon  the  claimant  to  support 
the  negative  of  the  proposition.  But  if  the  claimant  be 
a  citizen  or  an  ally  at  the  same  time  that  he  makes  out 
his  interest,  he  confesses  the  commission  of  an  offense 
which,  under  a  well-known  rule  of  the  civil  law,  deprives 
him  of  his  right  to  prosecute  his  claim.     *     *     * 

"Whether,  on  the  breaking  out  of  a  war,  the  citizen 
has  a  right  to  remove  to  his  own  country  with  his  prop- 
erty is  a  question  which  we  conceive  does  not  arise  in 
this  case.  This  claimant  certainly  has  not  a  right  to 
leave  the  United  States  for  the  purpose  of  bringing  home 
his  property  from  an  enemy  country;  much  less  could  he 
claim  it  as  a  right  to  bring  into  this  country  goods  the 
importation  of  which  was  expressly  prohibited." 

See  also  The  Diana  (1814)  (2  Gallison,  93,  97) ;  Jecker 
v.  Montgomery  (1855)  (18  How.,  110,  114);  The  Adula 
(1899)  (176  U.  S.,  361,  379),  and  cases  cited. 

The  Benito  Estenger  (1900)  (176  U.  S.,  568,  571): 

"By  the  law  of  prize,  property  engaged  in  any  illegal 
intercourse  with  the  enemy  is  deemed  enemy  property, 
whethei  belonging  to  an  ally  or  a  citizen,  as  the  illega 

55 


traffic  stamps  it  with  the  hostile  character  and  attaches 
to  it  all  the  penal  consequences." 

See  also  The  Carlos  F.  Roses  (1900)  (177  U.  S.,  655). 

Betts,  J.,  in  The  Crenshaw  (1861),  Blatchford's  Prize 
Cases,  27 : 

"Not  only  is  property  taken  trading  with  the  enemy 
liable  to  forfeiture,  but  it  is  subject  to  forfeiture  as  a 
prize  of  war." 

Nelson,  J.,  in  Charge  to  Grand  Jury  (1861)  (5 
Blatchf.,  549;  Fed.  Cases  No.  18271): 

"Trade  with  the  enemy  *  *  *  according  to  the 
law  of  nations  is  forbidden  and  the  property  engaged  in 
it  is  liable  to  forfeiture." 

Betts,  J.,  in  The  Shark  (1862)  (Blatchford's  Prize 
Cases,  p.  218). 

(3)  All  persons  doing  business  with  the  enemy, 
whether  citizens  of  the  United  States  or  citizens  of  the  other 
belligerent  nation  or  neutrals,  are  as  to  their  property  to  be 
deemed  enemies. 

Prize  Cases  (1862)  (2  Black,  674): 

"But  in  defining  the  meaning  of  the  term  'enemies' 
property,'  we  will  be  led  into  error  if  we  refer  to  Fleta 
and  Lord  Coke  for  their  definition  of  the  word  'enemy.' 
It  is  a  technical  phrase  peculiar  to  prize  courts,  and  de- 
pends upon  principles  of  public  policy  as  distinguished 
from  the  common  law. 

"Whether  property  be  liable  to  capture  as  'enemies' 
property'  does  not  in  any  manner  depend  on  the  personal 
allegiance  of  the  owner.  'It  is  the  illegal  traffic  that 
stamps  it  "as  enemies'  property."  It  is  of  no  conse- 
quence whether  it  belongs  to  an  ally  or  a  citizen.  (8  Cr., 
384.)  The  owner,  pro  hac  vice,  is  an  enemy.'  (3  Wash. 
C.  C.  R.,  183.) 

"The  produce  of  the  soil  of  the  hostile  territory,  as 
well  as  other  property  engaged  in  the  commerce  of  the 
hostile  power,  as  the  source  of  its  wealth  and  strength, 
are  always  regarded  as  legitimate  prize,  without  regard 
to  the  domicile  of  the  owner,  and  much  more  so  if  he 
residefand  trade  within  their  territory." 

56 


The  Flying  Scud  (1867)  (6  Wall.,  263,  266): 

"Although  they  are  Mexican  citizens,  yet  being  es- 
tablished in  business  in  the  enemies'  country,  must  be 
regarded  according  to  settled  principles  of  prize  law,  as 
enemies,  and  their  cotton  as  enemies'  property." 

See  Juragua  Iron  Co.  v.  United  States  (1909)  (212 
U.  S.,  297,  305,  306): 

"Cuba,  being  a  part  of  Spain,  was  enemy's  country, 
and  all  persons,  whatever  their  nationality,  who  resided 
there  were,  pending  such  war,  to  be  deemed  enemies  of 
the  United  States  and  of  all  its  people.  The  plaintiff, 
though  an  American  corporation,  doing  business  in  Cuba, 
was,  during  the  war  with  Spain,  to  be  deemed  an  enemy 
to  the  United  States  with  respect  to  its  property  found 
and  then  used  in  that  country,  and  such  property  could 
be  regarded  as  enemy's  property,  liable  to  be  seized  and 
confiscated  by  the  United  States  in  the  progress  of  the 
war  then  being  prosecuted." 

So  in  Young  v.  United  States  (1877)  (97  U.  S., 
39,  60): 

"All  property  within  enemy  territory  is  in  law  enemy 
property  just  as  all  persons  in  the  same  territory  are 
enemies." 

30  Hogsheads  of  Sugar  v.  Boyle  (1815)  (9  Cranch, 
191). 

The  Sarah  Starr  (1861)  (Blatchford's  Prize  Cases, 
74,  76): 

«*  *  *  L0yai  citizens  or  neutrals  who  *  *  * 
have  a  mercantile  domicile  in  an  enemy  country  are  re- 
garded in  the  prize  courts  in  their  commercial  dealings 
and  transactions  there  as  enemies  in  relation  to  vessels 
and  cargoes  owned  by  them  and  captured  at  sea.     *  *  * 

"The  American  authorities  are  equally  explicit  that 
a  neutral,  even  enjoying  the  privilege  of  consul,  domiciled 
and  trading  in  a  belligerent  country,  is,  in  war,  deemed  a 
belligerent,  and  his  acts  are  clothed  with  the  character 
of  one  of  its  subjects;  and  he  can  neither  hold  title  to 
property  acquired  in  such  country  during  war,  nor  confer 
it  upon  others,  against  the  interests  imparted,  by  capture 
at  sea,  to  adversary  belligerents." 

57 


The  Mary  Clinton  (1863)  (Blatchford's  Prize  Cases, 
p.  560). 

See  also  The  Venus  (1814)  (8  Cranch,  253);  The 
Vowles  (1814)  (ibid.,  348);  The  Frances  (1814)  (ibid., 
351);  Livingston  v.  Maryland  Ins.  Co.,  (1813)  (7  Cranch, 
542);  U.  S.  v.  Guillem  (1859)  (11  How.,  50);  The  William 
Bagaley  (1866)  (5  Wall.,  377);  Miller  v.  U.  S.  (1870)  (11 
Wall.,  268). 

(4)  In  general,  during  war,  contracts  with,  or  powers 
of  attorney  or  agency  from,  the  enemy  executed  after  out- 
break  of  war  are  illegal  and  void;  contracts  entered  into  with 
the  enemy  prior  to  the  war  are  either  suspended  or  are  abso- 
lutely terminated;  partnerships  with  an  enemy  are  dissolved; 
powers  of  attorney  from  the  enemy,  with  certain  exceptions, 
lapse;  payments  to  the  enemy  {except  to  agents  in  the  United 
States  appointed  prior  to  the  war  and  confirmed  since  the 
war)  are  illegal  and  void;  all  rights  of  an  enemy  to  sue  in 
the  courts  are  suspended. 

The  William  Bagaley  (1866)  (5  Wall.,  377,405,407): 

"Public  war  duly  declared  or  recognized  as  such  by 
the  lawmaking  power,  imports  a  prohibition  by  the  sov- 
ereign to  the  subjects  or  citizens  of  all  commercial  inter- 
course and  correspondence  with  citizens  or  persons  domi- 
ciled in  the  enemy  country. " 

Hanger  v.  Abbott  (1867)  (6  Wall.,  532,  535): 

"War,  when  duly  declared  or  recognized  as  such  by 
the  war-making  power,  imports  a  prohibition  to  the  sub- 
jects or  citizens  of  all  commercial  intercourse  and  cor- 
respondence with  citizens  or  persons  domiciled  in  the 
enemy  country.  Upon  this  principle  of  public  law  it  is 
the  established  rule  in  all  commercial  nations  that  trading 
with  the  enemy,  except  under  a  Government  license, 
subjects  the  property  to  confiscation  or  to  capture  and 
condemnation. 

"Partnership  with  a  foreigner  is  dissolved  by  the 
same  event  which  makes  him  an  alien  enemy.  *  *  * 
Direct  consequence  of  the  rule  as  established  in  those 
cases  is  that  as  soon  as  war  is  commenced  all  trading, 
negotiation,  communication,  and  intercourse  between  the 
citizens  of  one  of  the  belligerents  with  those  of  the  other 

58 


without  the  permission  of  the  Government  is  unlawful. 
No  valid  contract,  therefore,  can  be  made,  nor  can  any 
promise  arise  by  implication  of  law,  from  any  transaction 
with  an  enemy.  Exceptions  to  the  rule  are  not  admitted ; 
and  even  after  the  war  has  terminated  the  defendant,  in 
an  action  founded  upon  a  contract  made  in  violation  of 
that  prohibition,  may  set  up  the  illegality  of  the  transac- 
tion as  a  defense.  Various  attempts,  says  Mr.  Wheaton, 
have  been  made  to  evade  the  operation  of  the  rule  and  to 
escape  its  penalties,  but  they  have  all  been  defeated  by  its 
inflexible  rigor/ ' 

Coppell  v.  Hall  (1868)  (7  Wall.,  542,  554,  557,  558): 

"When  international  wars  exist  all  commerce  be- 
tween the  countries  of  the  belligerents,  unless  permitted, 
is  contrary  to  public  policy,  and  all  contracts  growing  out 
of  such  commerce  are  illegal.  Such  wars  are  regarded 
not  as  wars  of  the  governments  only,  but  of  all  the  inhab- 
itants of  their  respective  countries.  The  sovereign  may 
license  trade,  but  in  so  far  as  it  is  done  it  is  a  suspension 
of  war  and  a  return  to  the  condition  of  peace.  It  is  said 
there  can  not  be,  at  the  same  time,  war  for  arms  and  peace 
for  commerce.  The  sanction  of  the  sovereign  is  indispen- 
sable for  trade.  A  state  of  war  ipso  facto  forbids  it.  The 
government  only  can  relax  the  rigor  of  the  rule.     *     *     * 

"The  payment  of  money  by  a  subject  of  one  of  the 
belligerents,  in  the  country  of  another,  is  condemned, 
and  all  contracts  and  securities  looking  to  that  end  are 
illegal  and  void.     *     *     * 

"In  Griswold  v.  Waddington  (16  Johnson,  459,  460), 
Kent,  C.  J.,  said:  The  law  had  put  the  sting  of  disability 
into  every  kind  of  voluntary  communication  and  contract 
with  an  enemy  which  is  made  without  the  special  per- 
mission of  the  Government.  There  is  wisdom  and  policy, 
patriotism  and  safety  in  this  principle,  and  every  relaxa- 
tion of  it  tends  to  corrupt  the  allegiance  of  the  subject 
and  to  prolong  the  calamities  of  war.'" 

Miller  v.  United  States  (1870)  (11  Wall.,  268,  305, 
306): 

59 


"It  is  immaterial  to  it  whether  the  owner  be  an  alien 
or  a  friend,  or  even  a  citizen  or  subject  of  the  power  that 
attempts  to  appropriate  the  property.  In  either  case 
the  property  may  be  liable  to  confiscation  under  the  rules 
of  war.  It  is  certainly  enough  to  warrant  the  exercise 
of  this  belligerent  right  that  the  owner  be  a  resident  of 
the  enemy's  country,  no  matter  what  his  nationality. 
The  whole  doctrine  of  confiscation  is  built  upon  the 
foundation  that  it  is  an  instrument  of  coercion,  which, 
by  depriving  an  enemy  of  property  within  reach  of  his 
power,  whether  within  his  territory  or  without  it,  impairs 
his  ability  to  resist  the  confiscating  government,  while  at 
the  same  time  it  furnishes  to  that  government  means  for 
carrying  on  the  war.  Hence  any  property  which  the 
enemy  can  use,  either  by  actual  appropriation  or  by  the 
exercise  of  control  over  its  owner,  or  which  the  adherents 
of  the  enemy  have  the  power  of  devoting  to  the  enemy's 
use,  is  a  proper  subject  of  confiscation." 

United  States  v.  Lapene  (1873)   (17  Wall.,  601,  602): 

"All  commercial  contracts  with  the  subjects  or  in 
the  territory  of  the  enemy,  whether  made  directly  by 
one  in  person  or  indirectly  through  an  agent  who  is  neu- 
tral, are  illegal  and  void  *  *  *.  No  property  passes 
and  no  rights  are  acquired  under  such  contracts." 

And  see  also  Mrs.  Alexander's  Cotton  (1864)  (2 
Wall.,  404);  The  Ouachita  Cotton  (1867)  (1  Wall.,  521); 
United  States  v.  Lane  (1868)  (8  Wall.,  185,  195);  Dean  v. 
Nelson  (1869)  (10  Wall.,  158) ;  Lasere  v.  Rochereau  (1873) 
(17  Wall.,  437);  Day  v.  Micou  (1873)  (18  Wall.,  156); 
Mitchell  v.  United  States  (1874)  (21  Wall.,  350);  Fretz 
v.  Stover  (1874)  (22  Wall.,  198);  Mathews  v.  McStea 
(1870)  (91  U.  S.,  7,  9,  10);  Desmare  v.  United  States 
(1876)  (93  U.  S.,  605,  612);  Pike  v.  Wassell  (1876)  (94 
U.  S.,  711);  Conrad  v.  Waples  (1877)  (96  U.  S.,  279,  286); 
Burbank  v.  Conrad  (1877)  (96  U.  S.,  291);  United  States 
v.  Pacific  R.  R.  (1887)  (120  U.  S.,  227,  233);  Briggs  v. 
United  States  (1892)  (143  U.  S.,  346,  353);  Nelson,  J., 
dissenting  in  Prize  Cases  (1862)  (2  Black,  635,  687). 

See  also  Kershaw  v.  Kelsey  (1868)  (100  Mass.,  561, 

60 


672) ;  Trotter  on  Contract  During  War;  Page  on  War  and 
Alien  Enemies. 

(5)  Effect  of  war  on  contracts  previously  entered  into 
with  the  enemy. 

Hanger  v.  Abbott  (1867)  (6  Wall.,  532,  536): 

"Executory  contracts  also  with  an  alien  enemy,  or 
even  with  a  neutral,  if  they  can  not  be  performed  except 
in  the  way  of  commercial  intercourse  with  the  enemy,  are 
dissolved  by  the  declaration  of  war,  which  operates  for 
that  purpose  with  a  force  equivalent  to  an  act  of  Congress. 

"In  former  times  the  right  to  confiscate  debts  was 
admitted  as  an  acknowledged  doctrine  of  the  law  of  na- 
tions, and  in  strictness  it  may  still  be  said  to  exist,  but  it 
may  well  be  considered  as  a  naked  and  impolitic  right, 
condemned  by  the  enlightened  conscience  and  judgment 
of  modern  times.  Better  opinion  is  that  executed  con- 
tracts, such  as  the  debt  in  this  case,  although  existing 
prior  to  the  war,  are  not  annulled  or  extinguished,  but  the 
remedy  is  only  suspended,  which  is  a  necessary  conclu- 
sion, on  account  of  the  inability  of  an  alien  enemy  to 
sue  or  to  sustain,  in  the  language  of  the  civilians,  a  per- 
sona standi  in  judicio." 

What  contracts  are  merely  suspended  and  what  are 
terminated  by  a  state  of  war  is  considered  in  New  York 
Ins.  Co.  v.  Statham  (1876)  (93  U.  S.,  24,  31,  32/33,  35): 

"The  case,  therefore,  is  one  in  which  time  is  material 
and  of  the  essence  of  the  contract.     *     *     * 

"But  the  court  below  bases  its  decision  on  the  as- 
sumption that,  when  performance  of  the  condition  be- 
comes illegal  in  consequence  of  the  prevalence  of  public 
war,  it  is  excused,  and  forfeiture  does  not  ensue.  It 
supposes  the  contract  to  have  been  suspended  during  the 
war,  and  to  have  revived  with  all  its  force  when  the  war 
ended.  Such  a  suspension  and  revival  do  take  place  in 
the  case  of  ordinary  debts.  But  have  they  ever  been 
known  to  take  place  in  the  case  of  executory  contracts 
in  which  time  is  material?     *     *     * 

"The  truth  is  that  the  doctrine  of  the  revival  of 
contracts  suspended  during  the  war  is  one  based  on  con- 

61 


siderations  of  equity  and  justice,  and  can  not  be  invoked 
to  revive  a  contract  which  it  would  be  unjust  or  inequit- 
able to  revive. 

"In  the  case  of  life  insurance,  besides  the  materiality 
of  time  in  the  performance  of  the  contract,  another 
strong  reason  exists  why  the  policy  should  not  be  revived. 
The  parties  do  not  stand  on  equal  ground  in  reference  to 
such  a  revival.  It  would  operate  most  unjustly  against 
the  company.     *     *     * 

"We  are  of  opinion,  therefore,  that  an  action  can 
not  be  maintained  for  the  amount  assured  on  a  policy 
of  life  insurance  forfeited,  like  those  in  question,  by  non- 
payment of  the  premium,  even  though  the  payment  was 
prevented  by  the  existence  of  the  war.     *     *     * 

"*  *  *  Failure  being  caused  by  a  public  war, 
without  the  fault  of  the  assured,  they  are  entitled  ex 
aequto  et  bono  to  recover  the  equitable  value  of  the 
policies  with  interest  from  the  close  of  the  war." 

The  William  Bagaley  (1866)  (5  Wall.,  377,  407): 

"*  *  *  Executory  contracts  with  an  alien  enemy, 
or  even  with  a  neutral,  if  they  can  not  be  performed  ex- 
cept in  the  way  of  commercial  intercourse  with  the 
enemy,  are  ipso  facto  dissolved  by  the  declaration  of  war, 
which  operates  to  that  end  and  for  that  purpose  with  a 
force  equivalent  to  that  of  an  act  of  Congress." 

See  also  Gates  v.  Goodloe  (1879)  (101  U.  S.,  612, 
619-621);  Lamar  v.  Micou  (1884)  (112  U.  S.,  452,  464); 
United  States  v.  Dietrich  (1908)  (126  Fed.,  671,  674). 

See  also  Griswold  v.  Waddington  (1819)  (10  Johns, 
438);  Abell  v.  Insurance  Co.  (1881)  (18  W.  Va.,  406,  438); 
Moore's  International  Law  Digest,  volume  10,  page  244. 

(6)     As  to  the  effect  of  war  on  payment  of  interest. 

See  Trotter  on  Contract  During  War  (supplement), 
p.  61;  Trotter  on  Contract  During- War,  p.  49. 

See  also  Brown  v.  Hiatts  (1872)  (15  Wall.,  177,  185); 
Hoare  v.  Allen  (1789)  (2  Dallas,  102);  Foxcroft  v.  Nagle 
(1791)  (2  Dallas,  182);  Conn.  v.  Penn.  (1818)  (1  Peters 
C.  C,  496,  524);  Ward  v.  Smith  (1868)  (7  Wall.,  447, 
452);  Moore,  Dig.  Int.  Law  (vol.  7,  p.  252). 

m 


See  also  statement  in  22  Cyc,  1562,  and  30  American 
and  English  Ency.  Law  (2d  ed.),  p.  8.  (The  statements 
contained  in  these  last  two  references  do  not  seem  to  be 
in  entire  accord  with  the  Supreme  Court  decisions.) 

(7)  As  to  the  effect  of  war  on  payment  to  agents  of 
the  enemy,  and  upon  appointment  of  agents,  and  upon 
acts  performed  under  power  of  attorney  granted  by  the 
enemy  prior  to  war. 

Conn.  v.  Penn.  (1818,  Circ.  Ct.  Penn.)  (1  Peters  C. 
C.  496,  527,  528);  United  States  v.  Grossmeyer  (1869) 
(9  Wall.,  72,  73);  Ward  v.  Smith  (1868)  (7  Wall.,  447); 
University  v.  Finch  (1873)  (18  Wall.,  106);  Insurance 
Co.  v.  Davis  (1877)  (95  U.  S.,  425,  429);  Williams  v. 
Paine  (1897)  (169  U.  S.,  55,  70,  71). 

(8)  As  to  the  power  to  sue  in  the  courts. 

See  Hanger  v.  Abbott  (1867)  (6  Wall.,  532,  536, 
542);  Caperton  v.  Bowyer  (1871)  (14  Wall.,  216,  236); 
Masterson  v.  Howard  (1873)  (18  Wall.,  99,  105). 

An  alien  enemy  may  be  sued  in  the  courts  of  the 
United  States,  though  he  has  no  right  to  sue.  McVeigh 
v.  United  States  (1870)  (11  Wall.,  259);  University  v. 
Finch  (1873)  (18  Wall.,  106,  111). 

(9)  As  to  power  of  the  government  to  license  trade 
with  the  enemy. 

See  especially  United  States  v.  Lane  (1868)  (8  Wall., 
185,  195);  Hamilton  v.  Dillin  (1874)  (21  Wall.,  73,  97): 

"*  *  *  The  power  of  the  Government  to  impose 
such  conditions  upon  commercial  intercourse  with  an 
enemy  in  time  of  war  as  it  sees  fit  is  undoubted.  It  is?a 
power  which  every  other  government  in  the  world  claims 
and  exercises  and  which  belongs  to  the  Government  of  the 
United  States  as  incident  to  the  power  to  declare  _war 
and  to  carry  it  to  a  successful  termination." 

(10)  As  to  effect  of  war  on  statutes  of  limitation. 
See  Stewart  v.  Kahn  (1870)  (11  Wall.,  493);  United 

States  v.  Wiley  (1870)  (11  Wall.,  508);  The  Protector 
(1869)  (9  Wall.,  687);  Hanger  v.  Abbott  (1867)  (6  Wall., 
532). 

63 


(11)  As  to  rights  of  alien  enemies  resident  in  the 
United  States. 

See  Clarke  v.  Morey  (1813)  (10  Johns,  69);  Seymour 
v.  Bailey  (1872)  (66  111.,  288);  Princess  v.  Moffett  (1914) 
(W.  N.,  379);  Volkil  v.  Governors  (1914)  (2  I.  R.,  542); 
Forrestier  v.  Bordman  (1839)  (1  Story,  43);  Hallet  v. 
Jenks  (1805)  (3  Cranch,  210);  Brown  v.  United  States 
(1814)  (8  Cranch,  110);  Case  of  Fries  (1799)  (9  Fed. 
Cases  No.  5126,  pp.  830-832);  Lockington  v.  Smith 
(1819)  (1  Peters  Circ.  Ct.,  466,  472);  In  re  Lockington, 
Brightly,  N.  Dak.  (Pa.),  269;  Revised  Statutes,  sections 
4067-4070;  President's  Proclamation  of  April  6,  1917, 
as  to  alien  enemies. 

II. 

ENGLISH  CASES  DURING  THE  PRESENT 
EUROPEAN  WAR. 

A.  How  far  under  the  English  law  English  corpora- 
tions controlled  by  German  stockholders  are  to  be  regarded 
as  enemy, 

Amorduct  Manufacturing  Co.  v.  Debries  &  Co.  (84 
L.  J.  (K.  B.)  586;  112  L.  T.  131;  31  T.  L.  R.  69;  59  S.  J. 
91);  Rubber  Co.  v.  Daimler  Co.  (C.  A.  (1915)  1  K.  B. 
893;  84  L.  J.  K.  B.  926;  20  Com.  Cas.  209;  (1915)  W. 
N.  44;  59  S.  J.  232);  Daimler  Co.  v.  The  Continental 
Tyre  &  Rubber  Co.  (H.  L.  (E)  (1916)  2  A.  C.  307;  85 
L.  J.  (K.  B.)  1333;  114  L.  T.  1049;  (1916)  W.  N.  269; 
22  Com.  Cas.  32;  32  T.  L.  R.  624;  60  S.  J.  602);  In  re 
Hilches  Ex  parte  Muhesa  Rubber  Plantations  (Ltd.)  (C. 
A.  (1917)  1  K.  B.  48;  86  L.  J.  (K.  B.)  204;  (1916)  H.  B.  R. 
160;  115  L.  T.  490;  33  T.  L.  R.  28).  See  also  Societe 
Anonyme  Beige  des  Mines  d'  Aljustrel  v.  Anglo-Belgian 
Agency  (July  30,  1915)  (31  T.  L.  R.  624). 

B.  What  constitutes  trading  with  the  enemy? 

Moss  v.  Donohoe  (J.  C.  32  T.  L.  R.  343).  It  is  trad- 
ing with  the  enemy  to  order  from  an  American  company 
with  a  branch  in  Rotterdam  gin  which  the  defendant 

64 


knew  was  sent  by  such  branch  to  Hamburg,  Germany, 
for  bottling. 

The  Panariellos  (85  L.  J.  (P.)  112;  114  L.  T.  670; 
32  T.  L.  R.  459;  60  S.  J.  427).  A  British  subject  dis- 
patched goods  after  the  outbreak  of  war  and  with  know- 
ledge of  it  from  a  foreign  port  for  delivery  as  directed  by 
an  enemy  firm  and  for  their  benefit. 

Held,  that  this  constituted  trading  with  the  enemy 
and  the  goods  were  forfeit. 

Stephen  M.  Weld  &  Co.  v.  Fruhling  Goshen  (1916) 
(W.  N.  187;  32  T.  L.  R.  469).  The  plaintiffs  were  part- 
ners in  a  German  firm  and  a  draft  for  a  part  of  the  profits 
of  the  German  firm  was  drawn  and  accepted  before  war 
began  by  the  defendants.  The  draft  was  paid  over  to 
the  plaintiffs,  an  American  firm,  after  war  was  declared 
and  the  defendants  refused  payment. 

Judgment  for  the  defendants,  it  being  a  transfer  on 
behalf  of  an  enemy. 

In  re  Aramayo  Francke  Mines  (Ltd.)  (C.  A.  (1917) 
ICh.  451;  86  L.J.  (Ch.)  225;  116  L.T.  54;  (1917)  W.N. 
36;  33  T.  L.  R.  176).  When  a  corporation  incorporated 
in  England  and  doing  business  in  Bolivia  for  the  benefit 
of  the  allies  attempts,  in  order  to  avoid  taxes,  to  transfer 
the  assets  to  a  corporation  incorporated  in  Switzerland, 
the  court  held  that  an  order  should  be  made  appointing 
a  controller  under  the  trading  with  the  enemy  act  to 
prohibit  that  action. 

C.  What  constitutes  trading  for  the  benefit  of  the 
enemy  ? 

Rex  v.  Kupfer  (1915)  (2  K.  B.  321).  Kupfer  in 
England  made  payments  to  an  English  bank  to  be 
transmitted  to  a  Dutch  house  to  which  it  was  proved 
Kupfer  had  been  indebted  before  the  war. 

Held,  this  was  a  payment  for  the  benefit  of  the 
enemy. 

D.  Trading  with  branches  of  enemy  concerns  in 
allied  territory. 

Wolf  v.  Carr,  Parker  &  Co.  (Apr.  29,  1915)  (31  T.  L. 
R.  407). 

65 


E.  Contracts  of  insurance. 

W.  L.  Ingle  v.  Mannheim  Insurance  Co.,  (1915)  (1 
K.  B.  227;  84  L.  J.  (K.  B.)  491;  112  L.  T.  510).  A  suit 
may  be  maintained  against  a  branch  of  an  alien  enemy 
insurance  company  situated  in  England  on  a  policy  issued 
before  the  war.  The  loss  occurred  subsequently  and  a 
claim  to  recover  such  a  loss  is  not  a  "transaction  with  the 
enemy." 

F.  Appointment  of  a  custodian  and  distribution  of 
the  assets  and  details  of  administration  under  the  pecu- 
liar provisions  of  the  English  trading  with  the  enemy  act. 

Stevenson  &  Sons  (Ltd.)  v.  Aktiengesellschaft  (C.  A. 
115  L.  T.  594;  33  T.  L.  R.  84;  C.  A.  (1917)  1  K.  B.  842; 
32  T.  L.  R.  84;  61  S.  J.  146).  The  plaintiffs,  an  English 
company,  were,  at  the  outbreak  of  the  war  between 
England  and  Germany,  sole  agents  in  England  for  the 
defendants,  a  German  company.  There  was  also  a 
partnership  relation  between  the  two. 

Held,  that  both  agency  and  partnership  were  ter- 
minated at  the  outbreak  of  war,  and  that  the  determina- 
tion as  to  what  should  be  done  with  that  portion  of  the 
plaintiff's  assets  which  should  belong  to  the  German 
partners  was  one  for  Parliament  to  determine. 

On  appeal,  held,  that  lower  court  was  right  in  regard 
to  the  agency  and  partnership  and  that  the  enemy  part- 
ner was  entitled  to  a  share  of  the  profits  made  after  the 
dissolution  by  the  English  corporation  carrying  on  the 
business  with  the  aid  of  the  enemy  partners'  capital. 

In  re  Kastner  &  Co.,  Auto-Piano  Co.  v.  Kastner  &  Co. 
(1917)  (1  Ch.,  390;  86  L.  J.  (Ch.),  235;  116  L.  T.,  62; 
(1917)  W.  N.,  15;  33  T.  L.  R.,  149.)  Schmidtz  v.  Van  der 
Veen  &  Co.  (84  L.  J.  (K.  B.),  861;  112  L.  T.,  991;  31 
T.  L.  R.,  214.)  In  re  W.  Hagelberg  Aktiengesellschaft 
(1916),  2  Ch.,  503;  (1916)  W.  N.,  335.  In  re  Fried 
Krupp  Aktien-Gesellschaft,  (1916)  2  Ch.,  194;  114  L.  T., 
1026;  (1916)  W.  N.,  234;  32  T.  L.  R.,  553;  (1917)  W.  N., 
171. 

(a)  Right  of  a  custodian  of  a  corporation  to  vote 
the  shares. 

66 


In  re  R.  Pharaon  et  Fils,  C.  A.;  (1916)  1  Ch.,1; 
85  L.  J.  (Ch.),  68;  (1915)  H.  B.  R.,  232;  113  L.  T.,  1138; 
(1915)  W.  N.,  340;  32  T.  L.  R.,  47. 

A  custodian  in  whom  are  vested  shares  in  an  English 
company,  formerly  belonging  to  an  enemy,  may  vote  the 
shares  as  if  he  was  himself  the  stockholder. 

(b)     Right  of  alien  enemy  to  vote  his  shares. 

Robson  v.  Premier  Oil  &  Pipe  Line  Co.,  C.  A.  (1915), 
2  Ch.  124;  84  L.  J.  (Ch.),  629;  118  L.  T.,  523. 

G.  During  a  state  of  war  an  alien  enemy  may  not 
vote  shares  held  in  English  company,  but  right  of  voting  is 
suspended  until  after  war. 

(a)     Right  of  alien  enemy  to  sue  and  be  sued. 

Mercedes  Daimler  Motor  Co.  v.  Maudsley  Motor 
Co.  (32  R.  P.  C.  149;  (1915)  W.  N.  54;  31  T.  L.  R.  178). 

Two  companies  sued  as  coplaintiffs  for  patent  in- 
fringement. Agreement  between  them  provided  British 
company  had  sole  right  to  sue  for  infringement  and  could 
join  alien  enemy  as  coplaintiff  on  certain  notice. 

Held,  will  of  the  alien  enemy  not  relevant,  and  Brit- 
ish company  had  right  to  sue  alone. 
■    Turn  &  Taxis  v.  Moffett  (1915)  (1  Ch.  58;  84  L.  J. 
(Ch.)  220;  112  L.T.  114). 

An  alien  enemy's  wife  residing  and  duly  registered 
in  England  may  sue  upon  her  individual  rights. 

Halsey  et  al.  v.  Lowenfeld  (1915)  (W.  N.  400;  32 
T.  L.  R.  1). 

Held,  that  an  action  might  be  brought  against  an 
alien  enemy  on  a  lease  for  rent  occurring  after  commence- 
ment of  war. 

Vokl.u.  Governors  (1914)  (2  L.  R.  543);  Porter  v. 
Friendenberg  et  al..  C.  A.  (1915)  (1  K.  B.  857;  84  L.  J. 
K.  B.  1001;  20  Com.  Cas.  189). 

Alien  enemy  can  not  sue  unless  within  the  realm  by 
license  of  the  King.  He  may  be  sued  in  the  King's 
courts. 

J.  B.  Rombach  Baden  Clock  Co.  v.  Gent  &  Son 
(84  L.  J.  (K.  B.),  1558;  31  T.  L.  R.,  492). 

67 


On  dissolution  of  a  partnership  in  England  between 
a  naturalized  British  subject  and  alien  enemies,  the  for- 
mer being  appointed  receiver,  it  was  held  the  latter  could 
sue  for  partnership  debts  which  defendants  could  not 
withhold  as  payments  to  the  enemy.  Ex  parte  Bouss- 
macher  (1806)  (13  Ves.,  71),  and  Mercedes  Daimler 
Motor  Co.  v.  Mandslay  Motor  Co.  (1915)  (31  T.  L.  R.) 
followed. 

(b)  Stay  of  suit  due  to  outbreak  of  war. 
Robinson  &  Co.  v.  Mannheim  Continental  Insurance 

Co.  (1915)  (1  K.  B.,  155;  84  L.  J.  (K.  B.),  238;  20  Com. 
Cas.,  125);  In  re  Mary,  Duchess  of  Sutherland,  et  al.  v. 
Burna  et  al.  (C.  A.  31  L.  T.  R.,  394).  Commencement  of 
war  does  not  give  right  to  have  action  stayed  when 
brought  before  by  British  plaintiffs  against  a  German 
insurance  company. 

(c)  Internment  of  alien  enemy  plaintiff. 
Schaffenius  v.  Goldberg  (C.  A.    (1915)  W.  N.  386; 

32  L.  T.  R.,  133).  Internment  of  alien  enemy  plaintiff 
did  not  affect  his  right  to  prosecute  an  action  brought 
by  him  as  registered  alien  before  internment. 

(d)  Right  of  appeal. 

Porter  v.  Freudenberg  (C.  A.  (1915),  1  J.  B.,  857; 
84  L.  J.  (K.  B.),  1001;  20  Com.  Cas.,  189);  Orenstein  & 
Koppel  v.  Egyptian  Phosphate  Co.  Ct.  Sess.  (Sc.)  (1915 
S.  C.  55) ;  A.  A.  F.  in  Berlin  Chem.  Works  v.  Levinstein 
(C.  A.  84  L.  J.  (Ch.),  842;  32  R.  P.  C,  140;  112  L.  T. 
R.,  963).  Alien  enemy  plaintiff  in  action  commenced 
before  war  has  no  right  of  appeal  which  is  stayed  until 
conclusion  of  peace. 

Welsbach  Light  Co.  of  Australasia  (Ltd.)  v.  Common- 
wealth of  Australia  and  Attorney  General  of  Australia 
(J.  C.  33  T.  L.  R.,  332).  The  Attorney  General  of  Aus- 
tralia, acting  under  the  trading  with  the  enemy  act,  made 
a  declaration  that  the  petitioners  were  carried  on  for 
the  benefit  of  enemies  and  succeeded  in  bringing  the 
business  to  a  standstill.  They  brought  action  against 
him  denying  his  allegation  and  alleging  that  his  act  was 

68 


ultra  vires.     A  demurrer  was  sustained  and  the  appeal  to 
His  Majesty  in  council  denied. 

H.  All  executory  contracts  become  invalid  on  breaking 
out  of  war. 

Arnold  Karberg  &  Co.  v.  Blythe,  Green,  Jourdan  & 
Co.  (C.  A.  60  S.  J.,  156) ;  Duncan  Fox  &  Co.  v.  Schrempft 
&  Co.  (C.  A.  (1915)  3  K.  B.,  355;  84  L.  J.  (K.  B.),  2206; 
20  Com.  Cas.,  337;  113  L.  T.,  600);  Grey  (Edward)  &  Co. 
v.  Tolme  &  Runge  (31  T.  L.  R.,  551);  In  re  Shipton, 
Anderson  &  Co.  (Div.  Ct.  (1915),  3  K.  B.,  676;  84  L.  J. 
(K.  B.),  2137;  (1915)  W.  N.,  304;  31  T.  L.  R.,  598); 
Stevenson  v.  Aktien  Gesselschaft  (1916)  (1  K.  B.,  763); 
Distington  Hematite  Iron  Co.  v.  Possehl  &  Co.  (1916), 
(1K.B.,811;85L.J.(K.B.),919;(1916)W.N.,117;32T.L. 
R.  349).  A  contract  between  an  English  company  and 
a  German  firm  provided  that  the  German  firm  was  to 
take  a  certain  quantity  of  pig  iron  yearly,  but  upon 
failure  to  do  so  would  incur  no  liability  other  than  the 
loss  of  control  of  the  output.  The  vendor  agreed  that 
the  purchaser  should  be  considered  as  its  sole  agent.  It 
was  held  that  as  this  contract  involved  a  continuing 
effort  on  both  sides,  it  was  dissolved,  and  not  merely 
suspended,  on  the  outbreak  of  war. 

Zinc  Corporation  Ld.  »..Hirsh  (C.  A.  (1916),  1  K.  B., 
541;  85  L.  J.;  K.  B.,  565;  21  Com.  Cas.,  273;  114  L.  T., 
222;  (1916),  W.  N.,  11;  32  T.  L.  R.,  232).  The  plaintiffs, 
an  English  company,  made  a  continuing  contract  to  sell 
to  a  German  company  the  entire  production  of  zinc 
concentrates  from  their  mine  in  Australia.  The  contract 
contained  a  prohibition  against  the  plaintiffs  selling  to 
anyone  else,  and  further  enumerated  various  causes 
which  were  stipulated  as  reasons  for  a  failure  to  deliver 
the  concentrates.  War  was  not  specified  as  a  cause  of 
suspension. 

It  was  held  that  if  war  was  construed  as  a  cause  of 
suspension  of  delivery,  it  would  result  in  a  construc- 
tion of  the  contract  as  still  existing,  with  the  result  that 
the  prohibition  upon  the  plaintiffs  against  selling  to  any 
but  the  German  purchaser  would  be  operative,  and  that 

69 


therefore  it  was  for  the  public  good  to  consider  the  cancel- 
lation of  the  contract  as  having  occurred  from  the  out- 
break/pf^the^war. 

I.     Agency. 

Tingley  v.  Muller  (C.  A.  (1917),  W.  N.,  180;  116 
L.  T.  482;  33  T.  L.  R.,  369;  61  S.  J.,  478).  A  contract 
for  the  sale  of  land  was  entered  into  between  an  English 
purchaser  and  a  German  resident  in  England  and  a  de- 
posit paid.  The  vendor  left  for  Germany,  becoming  an 
alien  enemy,  but  left  a  power  of  attorney  in  an  English 
solicitor  to  complete  the  sale.  Held,  that  the  power  of 
attorney  was  not  revoked  by  the  vendor  becoming  an 
alien  enemy. 

Maxwell  v.  Grunhert  (C.  A.,  31;  T.  L.  R.,  79).  An 
agent  in  England  of  an  alien  enemy  principal  is  not  en- 
titled to  bring  an  action  for  a  decree  that  he  is  entitled 
to  called  debts  and  for  appointment  of  a  receiver. 

J.     Goods,  wares,  and  merchandise. 

King  v.  Oppenheimer  (1915)  (2  K.  B.,  755).  Held, 
that  certain  transfers  made  from  lithograph  stones  in 
Germany  were  goods,  wares,  and  merchandise. 

K.     Enemy  property. 

In  re  Bankfur  Handel  &  Co.  (1915)  (1  ch.,  848;  84 
L.  J.  (Ch.)  435;  113  L.  T.,  228).  A  debtor  to  an  alien 
enemy  is  not  a  person  who  holds  or  manages  for  or  on 
behalf  of  an  enemy  any  property. 

L.     Contracts  of  allied  subjects. 

Kreglinger  &  Co.  v.  Cohen  &  Co.  (21  T.  L.  R.,  592); 
Wolf  &  Sons  v.  Carr  et  al.  (C.  A.  (1915),  W.  N.,  195;  31 
T.  L.  R.,  407).  Held,  that  plaintiffs,  allied  subjects, 
could  not  sue  for  breach  of  contract  made  before  the  war 
with  persons  who  became  alien  enemies  at  outbreak  of 
war  and  repudiated  such  contracts  as  same  became  illegal 
at  outbreak  of  war. 


70 


National  Bank  of  Commerce 
in  New  York 

ORGANIZED  1S39 

President 
James  S.  Alexander 

Vice-Presidents 
R.  G.  Hutchins.  Jr.  Stevenson  E.  Ward 

Herbert  P.  Howell  John  E.  Rovensky 

J.  Howard  Ardrey  Guy  Emerson 

Cashier 
Far  is  R.  Russell 

Assistant  Cashiers 
A.  J.  Oxenham  A.  F.  Broderick 

William  M.  St.  John  Everett  E.  Risley 

Louis  A.  Keidel  H.  P.  Barrand 

A.  F.  Maxwell  Richard  W.  Saunders 

John  J.  Keenan  H.  W.  Schrader 

Gaston  L.  Ghegan  R.  E.  Stack 

Auditor  Manager  Foreign  Department 

A.  F.  Johnson  Franz  Meyer 

Statement  of  Condition 

September  11,  1917 

RESOURCES 

Loans  and  Discounts  -  $242,940,542.18 
U.  S.  Bonds  Borrowed  -  1,480,000.00 
U.  S.  Certificates  of  Indebtedness  -  -  10.430,000.00 
Other  Bonds,  Securities,  etc.  -  24,504,979.28 
Banking  House  -  2,000.000.00 
Due  from  Banks  and  Bankers  -  -  -  11,999,927.78 
Cash,  Exchanges  and  due  from  Federal  Re- 
serve Bank 72,247,424.89 

Customers'  Liability  under  Letters  of  Credit, 

Acceptances,  etc.    -----  39,646,874.13 

Interest  Accrued         -----  991.615.98 

$406,241,364.24 

LIABILITIES 

Capital,  Surplus  and  Undivided  Profits    -  -  $  45,864,385.99 

Deposits 317,544,135.74 

Letters  of  Credit  and  Acceptances             -  -       36,613,943.18 

Unearned  Discount     -----  1,498,899.33 

Other  Liabilities 4.720,000.00 

$406,241,364.24 


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